Citigroup, DBS Group Holdings and other banks involved in Singapore’s historic S$3 billion (US$2.2 billion) money laundering scandal, are increasing scrutiny of their rich customers to prevent involvement with illegal money flows.
Citi has instructed its wealth bankers to complete training on warning signs of money laundering within a month, people familiar with the matter told Bloomberg News.
These signs include clients from China’s Fujian and Guangdong provinces who do not speak English but hold “golden” passports from countries like Turkey, Saint Kitts and Nevis, or Vanuatu.
Significant transfers labeled as “loan repayments” to Citi customers from Hong Kong-based firms with no online presence are another red flag.
Swiss investment bank UBS Group, which acquired lender Credit Suisse in 2023, is also providing additional staff training.
Credit Suisse and Citigroup’s local unit held the largest amounts on deposit for the convicted in the scandal.
Singapore’s largest bank DBS Group, which had about S$100 million in exposure, is tightening its processes for vetting major client transactions.
Additionally, private bankers across several institutions are undergoing extra training to detect methods used by criminals to conceal their backgrounds and sources of funds.
Lenders in Singapore are voluntarily enhancing controls to close loopholes that allowed a group of criminals from China to launder more than S$3 billion in proceeds from online gambling through at least 16 financial institutions in the city-state’s largest-ever money laundering case, which came to light in August 2023, The Straits Times reported.
The Monetary Authority of Singapore (MAS), the country’s central bank, recently completed on-site inspections of some banks that were involved in the case.
Banks that had extensive dealings with the criminals through deposit accounts, loans, and other financial services are expected to face fines and other punitive measures from the financial regulator once the review concludes.
MAS will also evaluate whether these institutions have implemented adequate and appropriate safeguards against money laundering and terrorism financing and take action if they have not met the required standards, The Business Times reported.
The regulator also requested that banks not linked to the case have their know-your-customer (KYC) measures reviewed by external consultants.
