Bank fined £750,000 for lax laundering controls

Royal Bank of Scotland has been fined £750,000 by the City watchdog the Financial Services Authority for money laundering control failings, it was announced today.

The FSA said its investigation revealed "weaknesses in RBS's anti-money laundering controls across its retail network".

Carol Sergeant, managing director of the FSA, said: "This fine demonstrates that the FSA takes anti-money laundering compliance very seriously indeed."

The FSA said RBS failed to obtain sufficient documentation to adequately establish customers' identities and failed to retain such documentation in an "unacceptable number of new accounts".

"There was insufficient evidence to show that the clients were who they had claimed to be, whilst in some cases RBS were 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."

However, the FSA added: "In mitigation, RBS discovered the problems through its own testing in December 2001.

"Additionally, although the breaches revealed weaknesses in RBS's anti-money laundering controls, in most cases at least some attempt had been made to identify the customers."

The FSA added that RBS had devoted "considerable resources at an early stage" to correcting the problem and said it was satisfied the bank had dealt with the issue effectively.