Regulators take action over alleged anti-money laundering and sanctions compliance failures; OCC imposes record $750 million, around ₹7,146 crore, penalty as bank warns of third-quarter earnings impact
New Delhi. Bank of America, one of the largest banking institutions in the United States, has been fined $1.21 billion, approximately ₹11,529 crore, over widespread shortcomings in detecting and reporting suspicious financial activity.
According to US regulators, the bank failed to report more than $5 billion, approximately ₹47,640 crore, in suspicious transactions to the government. This included more than $1 billion, approximately ₹9,528 crore, associated with national security concerns and other priority illicit finance risks.
FCRF Launches CP-FRM to Build India’s Next Generation of Fraud Risk Professionals
The bank said the enforcement action would result in a charge of approximately $1.2 billion, or ₹11,434 crore, in its third-quarter financial results.
According to the US Treasury Department, the enforcement action represents the third-largest penalty in the department’s history. Regulators cited deficiencies in the bank’s anti-money laundering systems, transaction monitoring and compliance with financial sanctions.
Serious Deficiencies in Suspicious Transaction Monitoring
The US Treasury Department said Bank of America’s shortcomings prevented suspicious transactions from being identified and reported to authorities in a timely manner.
US Treasury Secretary Scott Bessent said financial institutions play an important role in protecting the country’s economic and national security. Regulators said failures by an institution of Bank of America’s size could expose the broader financial system to illicit finance risks.
According to regulators, deficiencies in the bank’s transaction-monitoring programme resulted in delayed suspicious activity reports involving billions of dollars.
Bank of America has since said it has invested heavily in technology and personnel to strengthen its financial crime controls and address concerns raised by regulators.
OCC Imposes Record $750 Million Civil Penalty
As part of the enforcement action, the Office of the Comptroller of the Currency imposed a $750 million civil penalty, approximately ₹7,146 crore, on Bank of America. Reuters reported that it is the largest civil penalty ever imposed by the regulator.
The OCC described the bank’s anti-money laundering compliance programme as deficient and ineffective and cited failures to address shortcomings identified under a 2024 cease-and-desist order.
Under the consent order, Bank of America is required to appoint an independent third party to review historical transactions. The review is intended to identify suspicious activity that may not have been detected or reported at the appropriate time.
In a separate sanctions-related action, the bank agreed to pay $11.6 million, approximately ₹111 crore, to the Office of Foreign Assets Control.
The penalty related to more than 400 apparent violations of sanctions programmes. The Treasury Department said the bank mistakenly processed millions of dollars in payments that violated sanctions involving countries including Russia and Iran.
Third-Quarter Earnings Expected to Take a Hit
Bank of America said its third-quarter results would include a non-tax-deductible charge of approximately $1.2 billion, or ₹11,434 crore.
The bank estimated that the charge would reduce earnings by approximately 17 cents per share, equivalent to about ₹16.20 per share at the October 13 exchange rate.
Analysts had estimated adjusted earnings of about $1.10 per share, approximately ₹104.81, according to estimates compiled by LSEG. Those forecasts excluded one-off items such as the regulatory penalties.
Following the announcement, Bank of America shares fell approximately 2.7% in after-hours trading after closing the regular session down 1.1%.
The enforcement action also raised questions about higher compliance expenses and whether Bank of America would be able to maintain its share repurchase programme, which Reuters reported was running at roughly $6 billion, approximately ₹57,168 crore, per quarter.
The regulators did not impose an asset cap, which would have restricted the bank’s ability to expand its balance sheet.
US Regulators Tighten Scrutiny of Financial Institutions
The action against Bank of America comes amid increased scrutiny of anti-money laundering controls across the US financial sector.
Days earlier, American Express was hit with a $350 million penalty, approximately ₹3,335 crore, over similar anti-money laundering compliance shortcomings.
Bank of America said it has invested billions of dollars in technology and deployed thousands of employees to combat financial crime. The bank has also said it has made substantial progress on work required under the regulatory consent order.
The enforcement action underscores the regulatory importance of effective transaction monitoring, timely reporting of suspicious activity and compliance with financial sanctions.
For major financial institutions, shortcomings in these areas can result in substantial penalties, increased compliance costs and closer regulatory scrutiny.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
Follow for daily updates on cybercrime, corporate fraud, DFIR, hacking, investigations, and digital forensics
