UK watchdog fines Al Rayan bank over money laundering control failures

By Huw Jones

LONDON (Reuters) -Britain's financial watchdog said on Wednesday it had fined Al Rayan Bank plc 4 million pounds ($4.85 million) for failing to put in place adequate controls to prevent money laundering.

Between April 1, 2015, and Nov. 30, 2017, Al Rayan allowed money to pass through the bank and be used within the United Kingdom without carrying out appropriate checks, the Financial Conduct Authority (FCA) said.

"Al Rayan was aware of these weaknesses and failed to implement effective changes to fix them, despite the FCA raising concerns about the inadequacies of their systems," the FCA said in a statement.

The bank did not dispute the findings and agreed to settle, thereby qualifying for a 30% discount on the fine, which otherwise would have been 5.7 million pounds, the FCA said.

Giles Cunningham, chief executive of Al Rayan Bank, said the FCA found no evidence of any money laundering or criminal activity by the bank or its customers, and none of the bank's existing management were in a senior role at the time.

"The financial penalty will have no material impact. The Bank remains well capitalised and will report very strong financial results for 2022," Cunningham said in a statement.

All identified weaknesses have been fully resolved, Cunningham said.

The FCA said the bank voluntarily agreed not to take on further high-risk customers after the watchdog's visit in 2017.

"This restriction has now been lifted, following improvements to the bank’s systems and controls, but the bank remains subject to some limited restrictions while further improvements are made," the FCA said.

Regulators have been putting pressure on banks to have strong anti-money laundering controls in place.

On Tuesday, the FCA fined the UK subsidiary of a Nigerian bank for similar failings.

($1 = 0.8243 pounds)

(Reporting by Huw JonesEditing by Mark Potter)