Financial Intelligence Unit imposes three penalties in Q3

  • Penalises People’s Merchant, Ideal Finance, Seylan
  • Total penalty stands at Rs. 2 million

The Financial Intelligence Unit (FIU) has imposed Rs. 2 million in penalties on three institutions – namely People’s Merchant Finance PLC, Ideal Finance Ltd., and Seylan Bank PLC – in the third quarter of this year, the Central Bank of Sri Lanka (CBSL) noted yesterday (2) in a statement.

People’s Merchant has been imposed a penalty of Rs. 1 million for non-compliance with the Financial Institutions (Customer Due Diligence) Rules No. 1 of 2016 (CDD Rules) in relation to procedures of United Nations’ sanctions screening.

The FIU observed during the on-site examinations that People’s Merchant had failed to implement systems and procedures to maintain the complete list of designated persons and entities under the relevant United Nations Security Council Resolutions (UNSCRs), screen its prospective customers at the time of onboarding as required by the CDD Rules, and implement any mechanism to screen the existing customer base or existing business relationships when any of the relevant UNSCR lists were updated in order to ensure that no business relationship was held by or linked to any of the entities or individuals included in the updated designated lists.

Although the lapses in systems and procedures were observed, instances of business relationships with designated individuals or entities by People’s Merchant were not revealed during the on-site examination. Since then, People’s Merchant has taken action to rectify the identified deficiencies, and significant improvement has been made on the implementation of the sanctions screening process in the company.

Ideal Finance and Seylan Bank have been imposed a penalty of Rs. 0.5 million each due to the same reason as People’s Merchant.