EMBATTLED COMMBANK FACES INQUIRY BY APRA OVER ITS 'GOVERNANCE AND ACCOUNTABILITY'

EMBATTLED COMMBANK FACES INQUIRY BY APRA OVER ITS 'GOVERNANCE AND ACCOUNTABILITY'

THE Commonwealth Bank (ASX: CBA) is set to face an inquiry from the Australian Prudential Regulation Authority (APRA) over concerns about its governance, culture and accountability.

APRA chairman Wayne Byres says the inquiry has been launched because of a series of issues at Australia's largest bank, including allegations by the federal government's financial crime agency, AUSTRAC, that it breached laws to combat money laundering and terrorism funding.

"The Australian community's trust in the banking system has been damaged in recent years, and CBA in particular has been negatively impacted by a number of issues that have affected the reputation of the bank," Byres says in a statement issued on Monday.

Earlier this month AUSTRAC, the Australian Transaction Reports and Analysis Centre, filed its claim alleging CBA failed to notify it of more than 53,000 transactions at its network of so-called 'intelligent' automated cash deposit machines (IDMs), with a total transaction value of $624 million.

IDMs can accept up to 200 notes per deposit or up to $20,000 per cash transaction with no limit on the number of transactions per day and it's alleged the breaches occurred unchecked for three years between 2012 and 2015.

"The overarching goal of the prudential inquiry is to identify any core organisational and cultural drivers at the heart of these issues and to provide the community with confidence that any shortcomings identified are promptly and adequately addressed," Byres says.

"CBA is a well-capitalised and financially sound institution. However, beyond financial measures, it is also critical to the long-run health of the financial system that the Australian community has a high degree of confidence that banks and other financial institutions are well governed and prudently managed.

The names of the panel members and the agreed terms of reference will be finalised and published at the commencement of the inquiry, which is expected to take around six months. The costs of the inquiry will be met by CBA.

"The Chairman and CEO of the CBA have assured me that the bank will fully cooperate with the inquiry, and APRA welcomes that cooperation."

Byres says the goal of the inquiry is to identify any shortcomings in the governance, culture and accountability frameworks and practices within CBA, and make recommendations as to how they are promptly and adequately addressed.

It would include, at a minimum, considering whether the group's organisational structure, governance, financial objectives, remuneration and accountability frameworks are conflicting with sound risk management and compliance outcomes.

Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.

Business News Australia

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Golden handshakes to departing ASX100 CEOs hit 12-year high

Golden handshakes to departing ASX100 CEOs hit 12-year high

Around one in every six CEOs of ASX100 companies left their job&nbs...

Maggie Beer Holdings CEO Kinda Grange resigns just 16 months into the job

Maggie Beer Holdings CEO Kinda Grange resigns just 16 months into the job

The revolving door of leadership at Maggie Beer Holdings (ASX: MBH)...

Dreamworld owner reports improved ticket sales despite severe peak season storms

Dreamworld owner reports improved ticket sales despite severe peak season storms

The owner of Gold Coast theme parks Dreamworld and WhiteWater World...

Peter Farrelly's action comedy Balls Up starring Mark Wahlberg to be filmed in QLD

Peter Farrelly's action comedy Balls Up starring Mark Wahlberg to be filmed in QLD

The Australian film industry continues to attract Hollywood product...