Rs. 3 mn penalties imposed on two financial institutions for FTRA violations

The Financial Intelligence Unit (FIU) of Sri Lanka has collected a total of Rs. 3 million in penalties from November to December 2024 from two financial institutions for non-compliance with the provisions of the Financial Transactions Reporting Act (FTRA).

The money collected as penalties was credited to the Consolidated Fund. 

The FIU of the Central Bank stated that Indian Bank was fined Rs. 2 million and Amana Takaful Life PLC Rs. 1 million on 18 December 2024. 

As per the statement, the Indian Bank had failed to report several Electronic Fund Transfer (EFT) transactions as of the examination date, where the amount of such transfers exceeded Rs. 1 million (Rs. 1,000,000) or its equivalent in any foreign currency to the FIU, as required by the Financial Transactions Reporting Regulations.

The bank had also failed to maintain updated lists of designated persons, groups and entities issued under United Nations Regulations, No. 1 of 2012 (United Nations Security Council Resolution (UNSCR) 1373), United Nations Regulations, No. 2 of 2012 (UNSCR 1267), and United Nations (Sanctions in relation to Democratic People’s Republic of Korea) Regulations of 2017 (UNSCR 1718) and incorporate the same into the Bank’s Anti-Money Laundering (AML) system.

Meanwhile, the administrative penalty was imposed on Amana Takaful Life for the failure to maintain an updated complete list of designated persons, groups and entities issued under United Nations Regulations, No. 1 of 2012 (UNSCR 1373) by the Gazette Extraordinary, No. 2387/02 dated, June 03, 2024.

The Company had also failed to comply with the Rule 58 of the Insurers (Customer Due Diligence) Rules, No. 1 of 2019 (CDD Rules) to verify whether any customers, prospective customers or beneficiaries appear on any list of designated persons or entities issued under any regulation made in terms of the United Nations Act, No. 45 of 1968 with respect to any designated list on TFS.

The FIU said that for both the entities, although the lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities maintained by the company were not revealed during the on-site examination.