The Bank of Israel will likely fine Israel Discount Bank (TASE: DSCT) and First International Bank of Israel (TASE: FTIN1;FTIN5) for violating the Prohibition on Money Laundering Law (5760-2000). A wide ranging audit at the two banks uncovered flaws in the application, auditing, and training of the law.
The Bank of Israel gave the banks the audit reports in June and July, and they have sent back their responses. The audit said that First International Bank had “ongoing failures”, but the bank disputes this. The bank added that it had already corrected some of the flaws, and it presented reservations about some of the others.
The Bank of Israel informed First International Bank that it would discuss its case at the sanctions committee meeting on November 4. The Bank of Israel intends to send a similar notice to Discount Bank this week.
Both banks can submit further responses to the Bank of Israel before the sanctions committee convenes. The committee will reportedly fine the two banks. If a fine is imposed, the banks can appeal the decision with the magistrates court within 30 days.
Published by Globes [online], Israel business news - www.globes.co.il - on October 9, 2007
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