The Monetary Authority of Singapore (MAS) announced on Tuesday that it plans to remove the status as a merchant bank in Singapore of BSI Bank Limited (BSI Bank) «for 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.» This is the first time that MAS is withdrawing its approval for a merchant bank since 1984.
In addition, MAS has referred to the Public Prosecutor the names of six members of BSI Bank’s senior management and staff to evaluate whether they have committed criminal offences. These are:
- Hans Peter Brunner, former CEO
- Raj Sriram, former Deputy CEO
- Kevin Michael Swampillai, Head of Wealth Management Services
- Yak Yew Chee, former Senior Private Banker
- Yeo Jiawei, former Wealth Planner
- Seah Yew Foong Yvonne, former Senior Private Banker
The Monetary Authority of Singapore (MAS) will allow the transfer of the assets and liabilities of BSI Bank Limited (BSI’s Singapore subsidiary) to the Singapore branch of EFG Bank AG. MAS and the Swiss Financial Market Supervisory Authority (FINMA) are working closely to oversee an orderly transfer.
«Clients of BSI Bank Limited are assured that both BSI and EFG are working for a fast and smooth transition. The Singapore subsidiary also has the full support of its parent bank, BSI,» said a statement by BSI, which also mentions that the bank has taken «note of the announcements by FINMA and MAS in relation to past compliance gaps related to the 1MDB case.»
MAS has also served BSI Bank notice to impose financial penalties amounting to $13.3 million for 41 breaches of MAS Notice 1014 – Prevention of Money Laundering and Countering the Financing of Terrorism. The breaches include failure to perform enhanced customer due diligence on high risk accounts, and to monitor for suspicious customer transactions on an ongoing basis.
Ravi Menon, Managing Director, MAS, said, “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.” Adding that “MAS is absolutely committed to safeguarding the integrity and reputation of Singapore’s financial centre. On this, there can be no compromise.”
BSI Bank had 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 that is in the process of been acquired by EFG International. Once completed, the merged entities will become one of the largest private banks in Switzerland.