Mohammad Ataur Rahman Prodhan, the former CEO of Sonali Bank (UK) Limited (SBUK), has been publicly censured for anti money laundering (AML) failings by the Financial Conduct Authority (FCA). Prodhan, who had responsibility for the establishment and maintenance of AML systems and controls, failed to assess and mitigate the AML risks arising from a culture of non-compliance among SBUK’s employees.
Between June 7, 2012 and March 4, 2014, Prodhan failed to ensure a clear allocation of responsibilities to oversee SBUK’s branches, including failed to properly oversee, manage, and resource the bank’s Money Laundering Reporting Officer (MLRO) function.
“Due to these failures, SBUK’s operational staff failed to appreciate the need to comply with AML requirements and the MLRO function was ineffective in monitoring their compliance. This led to systemic failures in SBUK’s AML systems and controls throughout the business” the final notice states.
“Mr Prodhan failed to maintain proper anti-money-laundering systems and allowed a culture of non-compliance among the bank’s staff,” said Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA.
Financial penalty
The FCA initially imposed a financial penalty of £76,400 ($90,270) on Prodhan in May 2018. He later referred the case to the Upper Tribunal, but because of the pandemic and personal limitations, the proceedings have been significantly delayed.
Prodhan has returned to Bangladesh and has no income or assets in the UK, and also has ongoing personal conditions which has limit his ability to travel back to the UK for the Upper Tribunal.
Even if the FCA found the financial penalty to be appropriate, the lack of any prospect of enforcing a payment led to the FCA replacing the penalty with a public censure.
“While a financial penalty was appropriate in this case, prolonged litigation to enforce a penalty that is unlikely to be paid against a person who may not be able to travel to the UK to explain himself in person to the Upper Tribunal is neither practical nor fair. In these exceptional circumstances, a public censure is an appropriate resolution of the case,” said Steward.
Prodhan has agreed to accept the public censure, and has withdrawn his referral to the Upper Tribunal.
The FCA did also fine SBUK and the bank’s former MLRO officer in 2016, £3,250,600 ($3,840,000) and £17,900 ($21,160) respectively. The MLRO officer was also prohibited from performing future MLRO or compliance oversight functions at regulated firms. Since then, SBUK has also renamed itself Sonali Bangladesh (UK) Ltd after a regulatory action by the Prudential Regulation Authority in August 2022.
This censuring is in line with FCA’s three-year strategy, where the FCA operates to prevent potential harm to consumers and the market.