The Royal Bank of Scotland was today hit with a £750,000 fine by
the UK's Financial Services Authority (FSA) for failing adequately
to establish the identity of its customers, in breach of money
laundering rules. It is the first time the FSA has imposed such a
penalty.
The FSA's investigation found that the Royal Bank failed either to obtain sufficient "know your customer" documentation adequately to establish customer identity, or to retain such documentation, in "an unacceptable number" of new accounts opened across its retail network in early 2002.
The FSA said today that there was insufficient evidence to show that the Royal Bank's clients were who they had claimed to be, whilst in some cases the Royal Bank was unable to supply copies or details of the documents (such as a valid passport, a driving licence, a recent utility bill) it had used to verify identity. Such evidence should have been retained for a period of five years from the end of the Bank's relationship with its customers.
Carol Sergeant, Managing Director of the FSA, said:
"The good news in this case is the prompt and effective way in which the shortcomings were addressed once senior management became aware of them. As a result of this, and RBS's open and constructive approach to the FSA's investigation, the fine imposed is very substantially lower than it otherwise would have been. The other good news is that there is no evidence of actual money laundering having taken place."
The fine was made under the FSA's new powers to make rules relating to the prevention of money laundering which took effect from 1 December 2001.
Further information about the FSA's anti-money laundering work can be found on its web site: www.fsa.gov.uk/what/ml_terrorist.html
