Four financial institutions, including the Singaporean lender DBS which has a strong presence in India, have been fined 3.8 Singaporean dollars for breaching anti-money laundering and anti-terrorism financing rules, a media report said on Wednesday.
DBS, along with homegrown OCBC, Citibank Singapore and insurer Swiss Life Singapore of Swiss Life Group, have been jointly fined 3.8 million Singaporean dollars for their role in a matter related to the German-registered payment firm Wirecard, one of the largest financial sector scams in recent years, The Straits Times reported.
The Monetary Authority of Singapore (MAS), a de facto central banker, on Wednesday, said the breaches were identified when it examined the four entities following news of irregularities in Wirecard AG’s financial statements, as well as the alleged involvement of Singapore-based individuals and entities in the matter.
The four financial institutions were found to have inadequate controls in place.
Breaches include failure to inquire into the background and purpose of transactions, failure to maintain relevant and up-to-date customer due diligence information relating to customers’ beneficial ownership, as well as failure to adequately establish the source of wealth of higher-risk customers and their beneficial owners, the report said.
“Although the breaches were serious, MAS did not find wilful misconduct by any staff of these financial institutions,” the report quoted the regulator as saying.
Of the four entities, DBS was fined 2.6 million Singaporean dollars for breaches between July 2015 to February 2020 relating to accounts maintained by 11 corporate customers. DBS ranks among the largest foreign banks in India.
OCBC was fined 600,000 Singaporean dollars for breaches between June 2015 and January 2016 relating to accounts maintained by one corporate customer.
Citibank was fined 400,000 Singaporean dollars for breaches between September 2019 and June 2020 relating to accounts maintained by two corporate customers, while Swiss Life was fined 200,000 Singaporean dollars for breaches in May 2017 relating to an investment-linked life insurance policy it had underwritten.
MAS said that the financial institutions have taken “prompt remedial actions” to address the deficiencies that were identified. These include enhancements to their procedures and processes, and training to improve staff’s vigilance in detecting and escalating risk concerns.
The penalty comes a day after two former employees of Wirecard Asia were jailed on Tuesday for helping their superior embezzle funds from the subsidiary of the German-registered international payment services company.
The alleged mastermind, Wirecard Asia vice-president of controlling and international finance Edo Kurniawan, an Indonesian, escaped Singapore before he could be nabbed. There is an Interpol red notice issued against him.
Payments firm Wirecard was a darling of Germany’s tech industry until it collapsed spectacularly in 2020 after acknowledging that billions of assets it listed on its books did not exist. The accounting scandal shocked the world and prosecutors are still pursuing those involved in the fraud scheme.