KUALA LUMPUR, May 24 — Singapore’s financial regulator today informed BSI Bank it was losing its merchant banking licence due to money-laundering violations and other misconduct.
The Monetary Authority of Singapore (MAS) said it detected serious issues with the bank tracing back to 2011, and will also recommend criminal charges against six BSI Bank executives.
The bank is under investigation over its dealings with a Malaysian investment firm.
“This is the first time that MAS is withdrawing its approval for a merchant bank since 1984, when Jardine Fleming (Singapore) Pte Ltd was shut down for serious lapses in its advisory work,” the regulator said in a statement on its website.
MAS assured the bank’s customers it possessed enough liquidity to honour all deposits, adding it will cooperate with Swiss financial regulators to ensure an orderly closure of the Singapore branch.
The Singapore agency today said it found repeated lapses within the BSI Bank, which prompted at least two additional investigations into the institution.
“A more intrusive third inspection by MAS in 2015 revealed multiple breaches of anti-money laundering regulations and a pervasive pattern of non-compliance,” MAS said.
The bank also undertook multiple unusual transactions that were without economic substance, and executed these without obtaining the necessary supporting documents and despite objections by the bank’s internal regulators.
Six senior BSI Bank managers were also found to be derelict in overseeing its dealings, which MAS said allowed the emergence of a “risk culture” that included misconduct such as making material misrepresentations to auditors, abetting improper valuations of assets, and executing unauthorised instructions.
The acts and omissions of the six executives in allowing the offences to occur were the main reasons for the withdrawal of the licence today, MAS said.
“BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector.
“It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously,” said MAS managing director Ravi Menon.
Singapore is already prosecuting a former BSI private banker on at least seven charges as part of the probe into the bank’s transactions involving a Malaysian firm.
The charges include forgery, money laundering, cheating BSI by dishonest concealment and obstructing justice, among others. – MMO