)
THE Commonwealth Bank (ASX: CBA) is set to face an inquiry from the Australian Prudential Regulation Authority (APRA) over concerns about its governance, culture and accountability.
APRA chairman Wayne Byres says the inquiry has been launched because of a series of issues at Australia's largest bank, including allegations by the federal government's financial crime agency, AUSTRAC, that it breached laws to combat money laundering and terrorism funding.
"The Australian community's trust in the banking system has been damaged in recent years, and CBA in particular has been negatively impacted by a number of issues that have affected the reputation of the bank," Byres says in a statement issued on Monday.
Earlier this month AUSTRAC, the Australian Transaction Reports and Analysis Centre, filed its claim alleging CBA failed to notify it of more than 53,000 transactions at its network of so-called 'intelligent' automated cash deposit machines (IDMs), with a total transaction value of $624 million.
IDMs can accept up to 200 notes per deposit or up to $20,000 per cash transaction with no limit on the number of transactions per day and it's alleged the breaches occurred unchecked for three years between 2012 and 2015.
"The overarching goal of the prudential inquiry is to identify any core organisational and cultural drivers at the heart of these issues and to provide the community with confidence that any shortcomings identified are promptly and adequately addressed," Byres says.
"CBA is a well-capitalised and financially sound institution. However, beyond financial measures, it is also critical to the long-run health of the financial system that the Australian community has a high degree of confidence that banks and other financial institutions are well governed and prudently managed.
The names of the panel members and the agreed terms of reference will be finalised and published at the commencement of the inquiry, which is expected to take around six months. The costs of the inquiry will be met by CBA.
"The Chairman and CEO of the CBA have assured me that the bank will fully cooperate with the inquiry, and APRA welcomes that cooperation."
Byres says the goal of the inquiry is to identify any shortcomings in the governance, culture and accountability frameworks and practices within CBA, and make recommendations as to how they are promptly and adequately addressed.
It would include, at a minimum, considering whether the group's organisational structure, governance, financial objectives, remuneration and accountability frameworks are conflicting with sound risk management and compliance outcomes.
Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
Business News Australia
Get our daily business news
Sign up to our free email news updates.
)
)
)
)
)
