Security & Fraud

RBS Probed On Alleged Global Money Laundering Scheme

rbs money laundering probe

The Royal Bank of Scotland (RBS) is facing questions from the Financial Conduct Authority (FCA) and other regulators about Russia money-laundering claims.

A report from Reuters noted that the probe was concerning allegations that the lender played a part in a worldwide money-laundering scheme. According to a statement from RBS, they responded to the FCA and regulators.

The alleged Russian-led scheme, which amounted to nearly $22.3 billion being passed through Moldova, used shell companies and fraudulent loans to launder funds from offshore Britain-based firms from 2011 to 2014.

Last week, lawmakers in Britain called for local regulators to investigate RBS, HSBC and Standard Chartered banks for handling suspicious money transfers.

RBS has been on somewhat shaky ground going into 2017.

In 2016, the bank experienced its fair share of struggles, including when RBS failed stress tests imposed by the Bank of England, and Santander — for the second time — decided not to go through with a planned acquisition of some of RBS’ branches.

But perhaps the biggest scandal the bank endured was that of its Global Restructuring Group (GRG). Allegations mounted this year against the GRG with claims that small business borrowers were forced into the group, even if the businesses were financially sound. The group then allegedly forced many of the companies into insolvency.

“We have acknowledged for some time that mistakes were made,” said the bank’s Chief Executive, Ross McEwan, in a statement last December. “Some of our customers went through what was a traumatic and painful experience as a result of the crisis. I am very sorry that we did not provide the level of service and understanding we should have done.”

Now the bank is gearing up to close 150 or more branches and lay off hundreds of employees in an effort to reduce costs, as the march toward digital banking continues to take hold.

According to a report in The Financial Times, RBS will reduce its branch network to slightly more than 1,000 branches after what the Times said was a “dramatic shift” in customers preferring to use mobile and online rather than going in person. As part of the downsizing of the branches, the report noted 744 full-time jobs will be eliminated, with about 300 of the employees being redeployed elsewhere at RBS. The move, noted the report, comes after RBS, which is 72 percent owned by the government, lodged an annual loss for the ninth year in the row. The report noted RBS is looking to realize £750 million of cost savings in 2017 and a total of £2 billion by the end of 2020.



The pressure on banks to modernize their payments capabilities to support initiatives such as ISO 20022 and instant/real time payments has been exacerbated by the emergence of COVID-19 and the compelling need to quickly scale operations due to the rapid growth of contactless payments, and subsequent increase in digitization. Given this new normal, the need for agility and optimization across the payments processing value chain is imperative.

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