US slaps curbs on Arab Bank branch

A US bank regulator has ordered Palestinian-managed Arab Bank Group to convert its New York branch to a federal banking agency, ending the branch’s wire transfer business.

    The bank's wire transfer business in New York has been shut down

    The US Office of the Comptroller of the Currency (OCC) on Friday said it determined the bank's branch had internal control weaknesses, especially in its international funds transfer activities.
       
    Arab Bank, by far the largest bank operating in the Palestinian territories, has had several lawsuits brought against it on behalf of relatives of US citizens killed or injured in violence in the Middle East, accusing the bank of helping move money to families of bombers.
       
    The Jordan-based bank has denied that it helped transfer such funds and said it had made extensive investments to promote peace by financing projects in Palestinian territories. 

    Directive 

    On Friday OCC said Arab Bank agreed to convert the branch to an agency office, maintain asset levels and take some steps to improve its compliance programme and internal controls. 

    Bob Chlopak, a spokesman for the bank, said the OCC order forces Arab Bank to exit the wire transfer business in New York, but allows it to continue activities in trade and corporate finance at the branch.
       
    The wire transfer business has historically accounted for about 9% of the bank's New York branch profit, Arab Bank said.
       
    Chlopak said the shortcomings cited by the OCC were not related to problems with specific transactions but to inadequacies in the bank's information system, such as information gathering, monitoring, auditing and filing suspicious activity reports.

    SOURCE: Agencies


    YOU MIGHT ALSO LIKE

    Interactive: Take a tour through divided Jerusalem

    Interactive: Take a tour through divided Jerusalem

    Take a tour through East and West Jerusalem to see the difference in quality of life for Israelis and Palestinians.

    Stories from the sex trade

    Stories from the sex trade

    Dutch sex workers, pimps and johns share their stories.

    Inside the world of India's booming fertility industry

    Inside the world of India's booming fertility industry

    As the stigma associated with being childless persists, some elderly women in India risk it all to become mothers.