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Germany’s Federal Financial Supervisory Authority (BaFin) has levied a €600,000 fine on KT Bank for breaching the German Money Laundering Act (GwG) and Banking Act (KWG).
The enforcement decision stems from significant compliance failures, including inadequate internal safeguards against money laundering, failure to retain customer identification records and insufficient monitoring of high-risk business relationships.
KT Bank, which describes itself as “the first bank in Germany which introduced comprehensive financial products and services according to Islamic banking principles”, also neglected to file required suspicious transaction reports and failed to seek executive approval for high-risk partnerships.
According to BaFin, a fine of €20,000 was imposed for each violation.
“Credit institutions must continuously monitor business relationships, including the transactions carried out during their course, and ensure that the relevant documents, data or information are updated at appropriate intervals,” the regulator said.
