Penalties worth over Rs.10mn imposed on five banks for non-compliance with FTRA provisions

The Central Bank has imposed penalties up to Rs.10.75 million on five banks for the July 1 to November 16 period, for not complying with the provisions of the Financial Transactions Reporting Act (FTRA).  
The Financial Intelligence Unit (FIU) of the Central Bank yesterday announced that the penalties were imposed on two state banks and three commercial banks. The penalties collected have been credited to the Consolidated Fund.  

The highest penalty for the period was imposed on DFCC Bank PLC, where Rs.4 million was to be paid for failing to adhere to the directions issued by the FIU and non-compliance with the provisions of the FTRA. 
Bank of Ceylon and People’s Bank were fined Rs.3 million and Rs.2 million, respectively. Both banks failed to screen all existing business relationships to ensure that no business relationship is held by or linked to any of the entities or individuals included in the designated list, as the banks have been maintaining  a business relationship with a person who is designated under United Nations Regulations No. 1 of 2012. 

National Development Bank PLC had to pay penalties amounting to Rs.1 million for failing to adhere to the directions issued by the FIU and non-compliance with the provisions of the FTRA, while National Savings Bank (NSB) was hit with a fine of Rs.750,000.

NSB failed to maintain all relevant United Nations Security Council Resolution (UNSCR) lists of designated persons and entities, as the bank did not maintain lists that included the designated persons and entities issued under the United Nations Regulations.
The FIU pointed out that although lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities maintained by NSB were not revealed during the onsite examination.