FCA fines Al Rayan Bank £4m for inadequate AML controls
UK regulator the Financial Conduct Authority (FCA) has fined Al Rayan Bank £4 million for “failing to put in place adequate anti-money laundering (AML) controls”.
FCA slaps Al Rayan Bank with £4m fine
The FCA says that between 1 April 2015 and 30 November 2017, Al Rayan handled money without checking customers’ Source of Wealth and Source of Funds, failing to ensure the funds were not connected to financial crime.
Levying a £4,023,600 penalty against the UK’s largest Islamic bank, the FCA claims staff were also insufficiently trained to handle large deposits, which “further heightened” the risk of money laundering and financial crime.
Mark Steward, executive director of enforcement and market oversight at the FCA, says the bank’s AML failures “create the conditions in which financial crime is facilitated and can take root within a firm”.
“While the risk was caught in time, the failings here were egregious,” Steward adds.
Despite raising its concerns about the bank’s systems, the regulator claims Al Rayan “failed to implement effective changes to fix them”. After the regulator visited Al Rayan in 2017, the bank agreed to not take on any more high-risk customers.
While this restriction has now been lifted following improvements to the bank’s systems and controls, the bank remains subject to some limited restrictions, the FCA says.
Al Rayan did not dispute the FCA’s findings and agreed to settle, qualifying for a 30% discount on the fine. The FCA would have imposed a financial penalty of £5,748,000 if a settlement wasn’t reached.
In a statement, Al Rayan Bank CEO Giles Cunningham says: “The FCA found no evidence of any money laundering or other criminal activity by the Bank nor its customers and none of the Bank’s existing management were in a senior management function at the time.
“The Bank cooperated fully throughout, and all identified weaknesses have been fully resolved with the support and assistance of external, independent subject matter experts.”
