By Chris Dorrell
The Financial Conduct Authority issued a £4m fine to Al Rayan Bank on Wednesday for “egregious” failures in its anti-money laundering rules.
The FCA said that between April 2015 and November 2017, Al Rayan allowed money to pass through the bank and be used within the UK “without carrying out appropriate checks.”
Al Rayan is a London-based bank, established in 2004, which offers Sharia compliant financial products to its customers.
In a statement released today, the FCA said: “The firm failed to adequately check its customers’ Source of Wealth and Source of Funds when it was required to make sure the money was not connected to financial crime.”
Al Rayan was aware of these weaknesses, the FCA said, and “failed to implement effective changes to fix them” despite the FCA raising concerns about inadequacies in Al Rayan’s system.
While the FCA clarified that there was no evidence of money laundering, it said the failings at Al Rayan were “egregious” and created the conditions in which financial crime “can take root within a firm”.
Responding to the fine, Al Rayan CEO Giles Cunningham commented: “The FCA found no evidence of any money laundering or other criminal activity by the bank nor its customers and none of the bank’s existing management were in a senior management function at the time.”
“The bank cooperated fully throughout, and all identified weaknesses have been fully resolved with the support and assistance of external, independent subject matter experts,” he continued.
Cunningham confirmed that the fine will have no “material impact”.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA said: “The FCA will continue to raise the stakes for firms that do not take their financial crime responsibilities seriously, especially in preventing money laundering risks which harms confidence and integrity in our market and in preventing financial crime”.
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