Two Sri Lanka banks fined for failing due diligence rules


COLOMBO – Sri Lanka’s Financial Intelligence Unit (FIU), which implements anti-money laundering and terror finance laws, has fined two banks for failing to meet customer due diligence rules.

The FIU, in a statement, said it had fined Union Bank of Colombo Rs 2.0 million on May 28 and DFCC Bank Rs 1 million on May 31, 2021

The statement said, FIU, as Sri Lanka’s regulator for Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT), imposed penalties, amounting to Rs. 3.0 million in total for the period from  April 1 2021 to June 30, 2021, to enforce compliance on Financial Institutions and that the money collected as penalties had been credited to the Consolidated Fund.

“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, ongoing scrutiny of transactions undertaken throughout the course of the business relationship with a customer, establishing and maintaining procedures and systems to ensure the process of monitoring and implementing proper risk controls and mitigation measures,” FIU explained.  It also noted that financial penalties are imposed on institutions for non-compliance with the provisions of the Financial Transactions Reporting Act, No. 06 of 2006 (FTRA) and that the penalty may be prescribed taking into consideration the nature and gravity of relevant non-compliance of the Financial Institution.


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