On July 22, 2025, the Hong Kong Monetary Authority (HKMA) announced disciplinary actions against three banks: 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) for violations of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO).
The HKMA disciplined IOBHK for multiple contraventions of the AMLO, imposing a reprimand, requiring a comprehensive look-back review of transaction alerts, mandating the development of a remedial plan, and levying a pecuniary penalty of HK$8,500,000. Investigations uncovered significant deficiencies in IOBHK’s management oversight of anti-money laundering controls, including inadequate leadership, insufficient staff training, and ineffective procedures for monitoring transactions. Notably, IOBHK failed to adequately assess complex or unusually large transactions and did not document findings for ten customers, resulting in violations of key AMLO provisions.
The HKMA also imposed a pecuniary penalty of HK$4,000,000 on BCOM(HK) following an investigation that found the bank had contravened two provisions—section 19(3) and section 5(1)(b) of Schedule 2 to the AMLO—between January 2018 and December 2024. Specifically, BCOM(HK) did not establish effective procedures for its transaction monitoring system (TMS), leading to certain transactions not being scrutinized properly. Additionally, the bank failed to continuously monitor business relationships for approximately 97,000 customers, neglecting to ensure that transactions aligned with its understanding of their profiles. While significant omissions were identified and rectified by September 2022, full resolution continued until December 2024. In determining the penalty, the HKMA considered the seriousness of the breaches, the need for deterrence, BCOM(HK)’s remedial actions, and its clean disciplinary record.
Similarly, the HKMA imposed a pecuniary penalty of HK$3,700,000 on BCOM Hong Kong Branch for violations of the AMLO. The investigation revealed that this branch contravened the same provisions—section 19(3) and section 5(1)(b)—during the same timeframe. The bank failed to establish effective procedures for its TMS during core banking system migrations, resulting in certain transactions not undergoing necessary scrutiny. Moreover, it did not continuously monitor the business relationships of about 3,900 customers, failing to ensure that transactions were consistent with its understanding of their profiles. Although major omissions were rectified by September 2022, complete resolution was achieved only by December 2024. The HKMA took into account the seriousness of the findings, the need for deterrence, BCOM Hong Kong Branch’s remedial actions, and its cooperative stance during the investigation.
Resources: https://www.hkma.gov.hk/eng/news-and-media/press-releases/2025/07/20250722-4/
