Bank of America fined $1.21 billion over money laundering and sanctions failures, about Rs 335 billion

The US Treasury on Tuesday announced penalties of more than $1.21 billion against Bank of America, the second-largest bank in the United States, for failures in its anti-money laundering (AML) and sanctions controls, Al Jazeera reported from the Associated Press. At today's dollar rate of about Rs 277, that is roughly Rs 335 billion. The Treasury described the package as including the third-largest penalty in its history.

Who fined the bank, and for what

The OCC's $750 million is credited against FinCEN's $1.2 billion, which is why the combined figure is about $1.21 billion rather than nearly $2 billion.

What went wrong, according to the Treasury

• Late reporting: the bank failed to report more than $5 billion in suspicious transactions to FinCEN on time.
• Outsourcing: it effectively handed a large part of its duty to detect and report suspicious activity to third parties.
• Weak checks: regulators found gaps in how it identified suspicious transactions and in its customer due diligence.

The OFAC settlement also commits the bank to new training, testing, audit and cooperation with the sanctions office. The Treasury has not said over what period the violations took place.

What both sides said

Treasury Secretary Scott Bessent said the consequences of such failures "extend far beyond its own walls" and that the action shows "even the biggest financial institutions are not above the law".

Bank of America said "financial crime compliance is serious", that it is responsible for getting it right, and that it has invested billions of dollars in technology and employs thousands of staff to fight financial crime. It said it will complete the work its regulators require. CNBC also reported the fine.

Why it matters in Pakistan

Pakistani banks work under the same global standards that these US rules enforce, through the Financial Action Task Force and the State Bank's AML regulations; Pakistan left the FATF grey list in 2022 after tightening exactly these controls. For customers here, that is why banks ask for source-of-funds documents, re-verify CNICs and flag unusual transfers. If you move money abroad, check the costs first with our currency converter.