MAS orders Swiss bank BSI to shut local operations for money laundering

It was also slapped with a $13.3 million fine.

The Monetary Authority of Singapore (MAS) has ordered Swiss BSI Bank Limited to cease its local operations after discovering serious breaches of anti-money laundering requirements, poor management oversight of the bank’s operations, and gross misconduct by some of the bank’s staff. 

Apart from revoking BSI’s merchant bank status, the MAS has also referred six members of the bank’s senior management and staff to the Public Prosecutor to evaluate whether they have committed criminal offences. It has also imposed financial penalties amounting to $13.3 million for 41 breaches of MAS Notice 1014 - Prevention of Money Laundering and Countering the Financing of Terrorism. 

BSI had "widespread control failures" which led to numerous serious breaches of various anti-money laundering regulations, the MAS said. The bank also had an "unacceptable" risk culture, with blatant disregard for compliance and control requirements as well as MAS regulations. The bank's senior management also had poor and ineffective oversight, while certain staff engaged in "numerous acts of gross misconduct".

The MAS said that it found considerable evidence of gross dereliction of duty and failure to discharge oversight responsibilities on the part of BSI Bank’s senior management. Their ineffective governance led to a poor risk culture, which prioritised questionable customer demands ahead of compliance with anti-money laundering regulations and the bank’s own internal controls.

“BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector. It is a stark reminder to all financial institutions to take their anti-money laundering responsibilities seriously. Controls need to be robust, surveillance vigilant, and the management culture must emphasise professional integrity and risk consciousness,” said Ravi Menon, Managing Director, MAS.

BSI Bank has been operating as a merchant bank in Singapore since November 2005 where it offers private banking services. It is a wholly-owned subsidiary of BSI SA, a bank founded in 1873 and headquartered in Switzerland.