On 6 August 2014, it was announced that Standard Chartered could face further fines for AML failings after US regulators identified new problems with the bank’s surveillance system. Back in August 2012, the bank agreed to pay a US$340 million fine for hiding $250 billion of transactions with Iran, and it could now be hit with another monetary penalty, more remedial action and an extension of a two-year monitoring period.
Now, you’d think that Standard Chartered’s senior staff would show a degree of contrition, perhaps even mortification or – old-fashioned concept – shame, at this discovery of their continuing general AML rubbishness. But not Standard Chartered Asia CEO Jaspal Bindra. In an interview with Reuters on 7 August, he came out fighting: “Banks have been asked to play the role of policing anti-money laundering. That’s the real purpose of all these sanctions and surveillance systems and all that. We are supposed to police that our counterparties and clients are not money laundering, and if when we are policing we have a lapse, we don’t get treated like a policeman who’s had a lapse, we are treated like a criminal.”
Now, perhaps I take too simplistic a view of the world. There are laws – such as AML laws. If you break a law, you commit a crime. And if you commit a crime, you are a criminal. But it seems that Mr Bindra is about two decades behind the times: he is still arguing that there should not be AML at all. Now, that was tried for quite a long while – about a millennium – and it didn’t go well, so it was eventually decided that those who handle other people’s money should take some responsibility for checking that it is not dodgy money. If you don’t agree with that, might I suggest that banking is not the career for you – much as someone who doesn’t support the concept of kitchen hygiene might be best advised not to run a restaurant. To be fair, Standard Chartered spokesman Jon Tracey did email Reuters with a clarification: “We want to be clear that Jaspal Bindra’s quote does not represent the bank’s view on anti-money laundering or conduct regulation. As Group Chief Executive Peter Sands said yesterday, Standard Chartered is fully committed to playing our role in supporting the regulatory conduct agenda and the fight against financial crime.” While you’re in the mood for that remedial work, SC, you might want to have a quick look at tone from the top, leading by example, etc.
I don’t think the banks are treated so much like police as regulated utilities. And I’d take the charge that banks are treated like criminals more seriously if their leaders actually faced criminal prosecution for AML deficiencies.
Their day may be coming, Money Jihad… I hear more and more talk about criminal prosecutions of responsible individuals.
Best wishes from Susan
I imagine Mr Bindra got more than a flea in his ear from Group Head Office. Talk about digging your own grave 🙂
Indeed, Roy – this is a classic case of when you should keep your own opinions to yourself, and not blurt them out to Reuters!
Best wishes from Susan