RBNZ Investigates Two Banks Over AML Compliance

The RBNZ is also looking into issues eight banks have identified issues with transaction reporting requirements over the past six months.

The RBNZ (Reserve Bank of New Zealand) is investigating ongoing non-compliance by a licensed insurer with its regulatory reporting, disclosure, and notification requirements, the central bank said in its financial stability report on Wednesday (25 November).

It is also looking into two banks’ compliance with the AML/CFT Act, including TSB Bank’s compliance with its obligations relating to its risk assessment and AML/CFT compliance programme as disclosed in its 2020 full-year disclosure statement. The other bank was not named.

In TSB’s disclosure statement, released on 30 July, the community-owned bank said it is “continuing to actively remediate” the issues identified by the RBNZ and providing regular updates on its progress. It also said it is in “constructive discussions” with the RBNZ regarding the alleged breaches and the civil proceedings that may result from them.

“The Bank is fully co-operating with the Reserve Bank. A provision in respect of a prospective liability has been made. Given the ongoing nature of the discussions with the Reserve Bank, further detail on this will be disclosed upon completion,” the disclosure statement said.

“The alleged breaches relate to the Bank’s obligations under its Risk Assessment and Compliance Programme. It is not alleged that any money laundering has occurred through the Bank.”

The RBNZ’s financial stability report implies that RBNZ supervisors have referred the above matters to the enforcement decision, which will make a recommendation on what action to take.

The report also reveals that eight banks have identified issues with their compliance with Prescribed Transaction Reporting (PTR) requirements over the past six months, primarily relating to failing to report prescribed transactions within the 10 day statutory timeframe.

“Most of these instances involved a small number of transactions and were due to technical error, human error, or coding error,” the RBNZ said. “However, PTR is an important requirement, and the Reserve Bank is continuing to investigate these issues.”

The full financial stability report is available here.

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