BNZ gets anti-money laundering warning after tech error

Source: 1News

The Reserve Bank has given BNZ a formal warning after it failed to report the right locations for thousands of cash transactions.

New Zealand bank notes (file picture).

The warning was given on Friday under anti-money laundering and countering the financing of terrorism rules.

The Reserve Bank said, between November 2018 and April 2020, BNZ failed to report the correct location for about 50,000 domestic physical cash transactions in prescribed transaction reports. These reports allow authorities to keep an eye on the flow of money in and out of New Zealand across the entire financial system.

BNZ figured out that it was caused by a technical coding error. The error led to the bank providing incorrect location information for the transactions to the Police Financial Intelligence Unit.

"Upon being alerted to the error in its reporting, BNZ promptly remediated the matter and has fully cooperated with the Reserve Bank during the investigation," the Reserve Bank said.

Reserve Bank deputy governor Christian Hawkesby said the central bank "appreciates that design errors can occur".