The Monetary Authority of Singapore (MAS) ordered for the shutting down of operations of BSI Bank in Singapore.
The Swiss bank has been present in Singapore since 2005 and engaged in private banking services.
The bank will lose its status as a merchant bank, as a result of “serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff.”
“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.
Controls need to be robust, surveillance vigilant, and the management culture must emphasize professional integrity and risk consciousness.” – Ravi Menon, Managing Director of MAS.
The last time such an incident took place in Singapore, was over 30 years ago. In 1984 Jardine Fleming was asked to wrap-up it’s outfit because of related lapses.
BSI Bank will also have to pay a fine of SGD 13.3 million, for breach of the regulations.
Allegations against the bank include:
- Unacceptable risk culture.
- Blatant disregard for compliance, control and regulatory requirements.
- Staff making material misrepresentations to auditors and abetting improper valuations of assets.
Several senior staff members will be investigated to evaluate if they have committed criminal offences.
“MAS found considerable evidence of gross dereliction of duty and failure to discharge oversight responsibilities on the part of BSI Bank’s senior management. Their ineffective governance led to a poor risk culture, which prioritized questionable customer demands ahead of compliance with anti-money laundering regulations and the bank’s own internal controls,” MAS said.
Recently, EFG International, a Swiss competitor, received approval to acquire BSI Bank.
The MAS has allowed the transfer of assets from BSI to EFG. This might reduce the number of job losses at the bank.