Deutsche Bank Ordered To Re-Examine 20,000 Risky Clients For Money Laundering

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Deutsche Bank AG is in trouble, again. The German regulator BaFin has demanded ordered the bank to monitor details of about 20,000 risky customers from the corporate and investment banking unit by the end of June. The news was first reported by Handelsblatt.

As part of this process, all important customer-related information and documents are required to be readily available by June. Also, the risky clients must be re-evaluated based on the new money laundering directive.

The newspaper also reported that review of medium-risk clients can be completed by June 2020, while lower risk customers’ re-evaluation can be done by 2021.

Deutsche Bank has been charged for weaknesses in its money laundering monitoring process by BaFin in the past as well. In September 2018, the bank was asked to undertake appropriate internal control measures and “comply with general due diligence obligations.” At the time, Deutsche Bank had said that it agrees with BaFin over need to improve processes to properly control wrongdoings. The regulator also appointed KPMG to assess and report the progress of the ordered measures.

Should Deutsche Bank fail to meet its requirements, BaFin can impose financial penalties on the bank or even dismiss some board members.

Last year’s scandals proved disastrous for Deutsche Bank, as global headwinds and its involvement in a number of legal probes dragged the stock price to all-time lows.

In December 2018, antitrust regulators at the European Union accused Deutsche Bank, Credit Agricole and Credit Suisse of rigging prices of U.S. dollar-denominated government bonds from 2009 to2015.

Further, suspicions of the German lender’s involvement in processing nearly $150 billion in potential payments at Danske Bank, which is at the heart of Europe’s one of the biggest money laundering scandals, affected its performance.