The Commonwealth Bank is alleged of swapping of the rates of the bank bills. This allegation was brought to the Commonwealth Bank by ASIC, due to which the bank has decided to pay a whopping $25 million to nullify the legal steps initiated by ASIC.
ASIC has already sealed a deal with CBA, which will confirm that the bank has not given enough importance to the process of security and misconducts, which had led to the situation of rate rigging.
The in-principle settlement must be approved by the Federal Court, which will fetch $15 million to the fund of financial consumer protection, $5 million as a penalty, and $5 million as a cost of ASIC from CBA.
In the meantime, the CEO of news bank, Matt Comyn had accepted that he had committed mistakes after the release of the damning report by the APRA or Australian Prudential Regulation Authority. The report revealed the rate swapping case of the commonwealth bank which also involved the huge money washing scandal.
It was found upon investigating that the bank has already broken the laws associated with the counter-terrorism financing and anti-money laundering laws 50,000 times. This discovery has led to a conclusion that the bank is not bothered about the laws and threats in its trade.
Amongst the series of event, CBA will also have to admit the breaches in the systems and policies, which restricted from monitoring every single staff. This loophole supported the scandal to take a proper shape. However, CBA has settled with ASIC that an expert will review the BBSW business, to avoid such incident from occurring again.
Fitch, which is the rating agency, has also degraded the outlook of Commonwealth bank due to its long-term overdue of debt. It has marked it as negative, which will compel the management to focus on the current operations of the bank.