Bank to shut down in regulator probe

License withdrawn from bank for first time in 32 years as information about criminal proceedings unfolds

If you thought there was ever controversy surrounding the banks here in Canada, then spare a thought for the ongoing developments in Singapore.

In the latest twist, the central bank has ordered BSI SA’s unit in the city-state to close down as it continues to probe a Malaysian state fund. This marks the first time in 32 years that a license has been withdrawn from a merchant bank in the region.

According to a Bloomberg report, BSI Bank Ltd has been served with a notice of intention to withdraw its merchant bank status, courtesy of the Monetary Authority of Singapore.

Speaking in a statement, Ravi Menon, the central bank’s managing director, commented that “BSI Bank is the worst case of control lapses and gross misconduct that we have seen in the Singapore financial sector.”
Meanwhile, criminal proceedings have also begun against the bank in Switzerland, according to the Swiss Attorney General.

All of the actions are seen as a significant step in the ongoing embezzlement and money laundering investigation. At least $4.2 billion has been identified by the Malaysian parliamentary committee in the way of irregular transactions by the state fund and it has recommended that the advisory board be disbanded. Around S$13.3 million will be imposed in financial penalties on the BIS unit for a total of 41 breaches.