ECONOMYNEXT – Sri Lanka Central Bank’s Financial Intelligence Unit (FIU) has imposed penalties on DFCC Bank and Sampath Bank for non-compliance with the provisions of the Financial Transactions Reporting Act, the Bank said.
The Central Bank has collected 1 million Sri Lanka rupees from DFCC in March and 2 million from Sampath Bank in April as penalties, it said.
DFCC “had failed to conduct adequate Customer Due Diligence (CDD) on an individual, including the requirement to obtain information on the source of funds/earnings as mandated by the Financial Institutions” as required by the law, the Central Bank said.
“It was observed that the amount deposited to the account was inconsistent with the customer’s anticipated Financial Intelligence Unit volumes from sources of income as stated in the account opening form,” the Central Bank said.
DFCC had also “failed to provide an acceptable and a valid reason for opening an account for the said individual whose permanent address, as given in the account opening application, at a location far away from the branch where the account was opened”, it said.
The lender had failed to recognize the suspicious activities related to the transactions of the individual and failed to file a Suspicious Transaction Report (STR) as well, the Central Bank said.
Sampath Bank was fined for creating and maintaining accounts where the account holder could not be identified, the banking regulator said.
“The business relationships of these customers could not be traced in the Core Banking System using identification data, such as National Identity Card numbers, as their information was not linked to these accounts,” it said in the statement.
“The Bank had failed to freeze funds, financial assets or economic resources of designated persons,” under United Nations Security Council Resolution, without delay as per UN regulation, the Central Bank said. (Colombo/June 26/2024)