By Stanley Ugagbe
The Ireland Central Bank has fined Bank of Montreal 1.25 million euros for breaching a condition of its banking license.
According to the central bank, the Bank of Montreal Ireland failed to establish and maintain processes and controls to ensure the submission of certain reports regarding operational risk.
The apex bank added that the BMO was also over-reliant on its parent’s group policies.
Speaking on the need for banks to adhere strictly to Banking regulations, Director of enforcement and anti-money laundering, Seana Cunningham said “All firms operating in Ireland must do so in line with their regulatory licence, and all conditions attaching to it”
He continued that “Compliance with licence conditions is not optional, and breaches are treated seriously by the Central Bank.”
On their part, the Bank of Montreal has admitted the breaches in full.
The Ireland Central Bank said the appropriate fine amounted to 1.78 million euros but was reduced by 30 per cent, as per its procedures for early settlements.
It would be recalled that in October 2015, Bank of Montreal told the Central Bank that it had failed to submit three operational risk reports which were due at the end of 2014, March 2015 and June 2015. The development was in reach of a condition of the firm’s licence and was identified through an internal audit of the company’s operational risk management function.
However, investigation by the Central Bank revealed that the bank did not have the correct processes and controls in place to ensure that the filings were made.
The apex bank had noted that the lender had an “inadequate informal process” of email diary reminders to alert the relevant employees of when a reporting submission was due.
The Central Bank further stated that they were time limited and the final reminder was set for November 2014.
It said “This is concerning in circumstances where the firm had been previously informed in 2013 by the Central Bank that its regulatory reporting of operational risk was not to the required standard”.
It is imperative to note that this present fine is coming five years after the Central Bank imposed a €650,000 monetary penalty on Bank of Montreal Ireland for various regulatory breaches.
