Hong Kong Monetary Authority Penalizes Banks for AML Violations

HKMA Enforces Disciplinary Actions

The Hong Kong Monetary Authority (HKMA) has taken significant disciplinary measures against three banks for contraventions of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO), as announced on July 22, 2025. The banks involved are Indian Overseas Bank, Hong Kong Branch (IOBHK), Bank of Communications (Hong Kong) Limited (BCOM(HK)), and Bank of Communications Co., Ltd., Hong Kong Branch (BCOM Hong Kong Branch), according to the [Hong Kong Monetary Authority](https://www.hkma.gov.hk/eng/news-and-media/press-releases/2025/07/20250722-4/).

Details of the Penalties

The HKMA reprimanded IOBHK and imposed a pecuniary penalty of HK$8,500,000. Additionally, IOBHK has been ordered to conduct a comprehensive review of past transactions and implement corrective measures to address the identified deficiencies. BCOM(HK) and BCOM Hong Kong Branch were fined HK$4,000,000 and HK$3,700,000 respectively. These actions are detailed in the Statements of Disciplinary Action issued by the HKMA.

Investigation Findings

The disciplinary actions stem from HKMA’s investigations into the banks’ compliance systems under the AMLO. The investigations revealed significant shortcomings in IOBHK’s transaction monitoring mechanisms and management oversight of anti-money laundering and counter-financing of terrorism (AML/CFT) controls. Furthermore, BCOM(HK) and BCOM Hong Kong Branch were found to have omitted certain transaction types from their monitoring systems, compromising their efficacy in detecting suspicious activities.

HKMA’s Stance on AML Compliance

In determining the penalties, the HKMA considered several factors, including the severity of the deficiencies, the necessity of sending a deterrent message to the banking sector, and the remedial actions taken by the banks. Notably, the banks have no prior disciplinary records related to AMLO and cooperated with HKMA during the investigations.

Mr. Raymond Chan, Executive Director (Enforcement and AML) at HKMA, emphasized the importance of effective transaction monitoring in the timely identification and reporting of suspicious transactions. He urged bank management to ensure robust transaction monitoring systems are in place and any identified issues are addressed without delay.Image source: Shutterstock