Five financial institutions fined under SL’s anti-money laundering laws

The Bank of Ceylon (BOC) heads the list of offenders who have been penalised by the Central Bank (CB) for violations under the Financial Transactions Reporting Act for 2019/2020, the CB announced on Friday.

The CB said a penalty of Rs. 3 million was imposed on the BOC, Rs. 1 million on the Nations Trust Bank, Rs.1 million on Commercial Credit and Finance PLC, and Rs. 500,000 each on Sarvodaya Development Finance Ltd and UB Finance Ltd.

The Financial Intelligence Unit (FIU) of the CB was acting under the powers vested under Section 19 (1) read together with section 19 (2) of the Financial Transactions Reporting Act, No. 06 of 2006 (FTRA), where financial penalties can be imposed on institutions for non-compliance with the provision of the FTRA. 

It said as the regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in the country, the FIU imposed penalties in a sum total of Rs. 5 million for 2019 and Rs. 1 million up to May 31, 2020 to enforce compliance on financial institutions. 

“The Monetary Board of the CB at its meeting dated July 1, 2020 decided to publish the penalties imposed on the financial institutions by the FIU in order to improve the AML/CFT compliance level in the country,” the statement said adding that penalties were imposed mainly on the violations of Financial Institutions (Customer Due Diligence) Rules, No. 1 of 2016 in relation to third party deposits, obtaining approval for Politically Exposed Persons (PEPs), sanctions screening and financial transaction reporting under Section 6 of the FTRA.