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Singapore's central bank cracks down on BSI

Singapore’s central bank cracks down on BSI

(24 May 2016 – Singapore) Singapore’s central bank has ordered BSI SA to close its merchant banking operations over alleged breaches of anti-money laundering rules and "gross misconduct" by staff.

The Monetary Authority of Singapore (MAS) served the bank a notice of intention to withdraw its status as a merchant bank for breaches of money laundering rules, it said in a statement.

“BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector," Ravi Menon, managing director of the central bank, said in the statement.

“It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously.”

As part of ongoing investigations spanning Malaysia to Switzerland, a Malaysian parliamentary committee has identified at least US$4.2 billion (A$5.8billion) of irregular transactions by the state fund, and has recommended the advisory board headed by the country’s Prime Minister Najib Razak be disbanded.

Further, MAS will also impose S$13.3 million (A$13.3 million) in financial penalties on the BSI unit for 41 breaches, including its failure to conduct due diligence on high-risk accounts and monitor for suspicious customer transactions.

The central bank has also referred six senior BSI executives to the public prosecutor, including the Swiss private bank’s former Singapore chief executive officer and his deputy. The prosecutor will assess if there were any criminal offenses.

BSI Bank has been operating as a merchant bank in Singapore since November 2005. It is a wholly owned subsidiary of Swiss bank BSI. Switzerland-based EFG International is currently in the midst of acquiring the entire BSI group, and MAS will allow the transfer of the Singapore subsidiary's assets to the Singapore branch of EFG Bank or to BSI SA.

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