Banks treated like 'criminals' says Standard Chartered CEO

Banks are being too harshly penalised for minor errors in efforts to extinguish money laundering, said Jaspal Bindra, Standard Chartered Asia chief executive.

On Wednesday, Standard Chartered said a computer error in a surveillance system that is a part of the bank’s anti-money laundering controls would result in a fine and could also lead to an extension of a two-year monitoring period the bank is currently serving for breaking US sanctions, as they hid transactions linked to Iran in 2012.

Speaking to Reuters news agency on Thursday, Bindra said banks were being treated like ‘criminals’.

‘Banks have been asked to play the role of policing anti-money laundering [...] but when we have a lapse we don’t get treated like a policeman, we are treated like a criminal,’ said Standard CEO.

Bindra insisted the bank had addressed its compliance issues by hiring more people and establishing a multi-year plan to raise awareness over the importance of compliance and anti-money laundering among its 89,000 employees.

In 2012 Standard Chartered paid a total of $670m – £397m at the current exchange rate – in settlements to US authorities and Reuters reported the new fine could be in the region of $100m and $340m – between £59m and £201m.

‘The issue is not so much about whether the U.S. is wrong or right, you have fines in every country, every regulator has fines, but it’s the level of fines that is quite difficult for banks,’ said Bindra.

Standard chief’s comments follow remarks by HSBC Chairman Douglas Flint, who on Monday claimed the authorities’ determination to punish the banks was preventing his bank from taking reasonable business risks.

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