Central Bank fines 2 banks for violation of anti-money laundering laws

The Central Bank has fined the Union Bank of Colombo Rs.2 million and DFCC Bank Rs. 1 million for violation of anti-money laundering laws.

In a statement issued on Tuesday, the Bank said that by virtue of the powers vested under Section 19 (1) read together with section 19 (2) of the Financial Transactions Reporting Act, No. 06 of 2006 (FTRA), financial penalties are imposed on institutions for non-compliance with the provisions of the FTRA. The penalty may be prescribed taking into consideration the nature and gravity of relevant non- compliance of the financial institution.

“Accordingly, as Sri Lanka’s regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), the FIU (part of the Central Bank) imposed penalties, amounting to Rs. 3 million in total for the period from 1 April 2021 to 30 June 2021 to enforce compliance on financial institutions,” the statement said.

The money collected were as penalties and credited to the Consolidated Fund. Penalties were imposed mainly on the violations of Financial Institutions (Customer Due Diligence) Rules, No. 1 of 2016 in relation to the United Nations sanctions screening, ongoing scrutiny of transactions undertaken throughout the course of the business relationship with a customer, establishing and maintaining procedures and systems to ensure the process of monitoring and implementing proper risk controls and mitigation measures.