Kiwibank censured for money-laundering rule failure

Kiwibank said it considered the money remitting business of E-Trans posed too great a risk or burden to it under anti-money laundering rules that came into force in 2013.

The Reserve Bank says it has issued a formal warning to state-owned Kiwibank for failing to comply with sections of the Anti-Money Laundering (AML) and Countering Financing of Terrorism Act.

In a statement, the Reserve Bank said it had "reasonable grounds" to believe that for various periods of time between June 30 2013, and June 2014, that Kiwibank did not fully meet all the requirements in respect to the following customer due diligence obligations under the act.

Kiwibank, in a separate statement, said it accepted that it did not meet some of the requirements during the period and had taken steps to remedy the issues identified.

The bank said it had comprehensive compliance programmes in place and was committed to ensure that its AML programme operated effectively to prevent any attempted laundering of money.

The Reserve Bank said Kiwibank had not collected addresses of customers performing occasional transactions, as required by the act.

It also said Kiwibank did not always take reasonable steps to verify information relating to the source of funds or the wealth of the customer and did not consider terminating customers' accounts in response to its ongoing non-compliance.

Since June 2014, Kiwibank has taken remedial action to address its compliance issues, the Reserve Bank said.