FIU Imposes financial penalties on Commercial Bank and Kanrich Finance

The Financial Intelligence Unit (FIU) imposed financial penalties on the Commercial Bank of Ceylon PLC and Kanrich Finance Ltd for non-compliance with the provisions of the Financial Transactions Reporting Act, No. 06 of 2006 (FTRA), the Central Bank of Sri Lanka (CBSL) revealed.

Accordingly, as the regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) in the country, the FIU imposed penalties, totaling Rs. 4 million for the period from 1st of January 2021 to 31st of March 2021 to enforce compliance on this Financial Institutions. 

Commercial Bank of Ceylon PLC was slapped with an Rs.3 million penalty on the 18th of February this year and Kanrich Finance Ltd was slapped with an Rs one million penalty on the 20th of January 2021.

“Penalties were imposed mainly on the violations of Financial Institutions (Customer Due Diligence) Rules, No. 1 of 2016 in relation to the United Nations sanctions screening, customer identification, and verification, Suspicious Transactions Reporting and implementation of proper risk controls and mitigation measures,” the CBSL stated.

Furthermore, the FIU urged the Financial Institutions (FIs) to to be vigilant and pursue additional measures to protect the FIs as well as the financial system from any possible money laundering/ terrorist financing risks arising during the third wave of COVID-19 Pandemic.

“The criminals may attempt to use the pandemic as an opportunity to misuse the Fls for their intended unlawful activities. Therefore, the Fis are required to strengthen the process of conducting customer due diligence, ongoing monitoring of customers and scrutiny of transactions and also awareness among all levels of staff on possible risks in order to mitigate the exposed risk, if any,” AML/CFT regulator warned in a letter to to the top officials of FIs.