Bank Fine 1.25 Million Pounds for Bad Record Keeping


Bank of Scotland has been fined a record �1.25 million for breaching anti-money laundering rules on the identification of customers.

The Financial Services Authority (FSA) said in half of test cases BoS had failed to retain a copy of customer ID or a record of where it was kept.

The fine is the largest ever imposed for inadequate record-keeping following the introduction of money laundering rules by the City watchdog in 2001.

But the sum is exceeded by the �2 million fine issued against Abbey National for failing to keep proper money laundering procedures in place.

Andrew Procter, director of enforcement at the FSA, said the record-keeping failures by BoS could have "seriously undermined" its ability comply with the requirements of law enforcement agencies.

He added: "The size of the fine demonstrates that failure by firms to put in place and maintain effective systems and controls will be dealt with severely by the FSA."

BoS, which is part of the HBOS group, said the problems were first detected in December 2002 and that remedies were soon put in place to tackle the failings. These included the introduction of improved automated systems.

The Edinburgh-based group added: "Bank of Scotland regrets this error on its part and is working closely with the FSA in the fight against money laundering. There is no evidence of any money laundering or of any Bank of Scotland customers having been adversely affected as a result of the problem."

The FSA added that compliance rates at BoS had improved significantly since January 2003 and that it was satisfied the bank had dealt with the issue.


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