Ulster Bank has been fined almost n2 million over liquidity risk management failures, it emerged yesterday.
The Irish Republic Central Bank said the n1.96m penalty reflected the importance it placed on compliance with prudential requirements for credit institutions.
Peter Oakes, director of enforcement at the Central Bank said failure to meet requirements was an unacceptable risk.
“This enforcement action and the penalties imposed reflect the importance the Central Bank places on compliance with all aspects of key prudential requirements,” he said.
“Regulated firms must fully comply with their liquidity and capital requirements including, establishing and maintaining effective internal controls for the management of liquidity risk and having in place sound and effective strategies and processes to address internal control requirements.”
Ulster Bank was found to have had a shortfall of n313m in its safeguards against risk in a regulatory return filed on March 31 earlier this year.
Parent company Royal Bank of Scotland immediately made a cash injection when the mistake was revealed.
“This settlement is significant and we acknowledge that these contraventions, which occurred in 2011, were unacceptable,” said Ulster Bank CEO Jim Brown. “We identified the contraventions ourselves and we have since implemented a number of robust measures to ensure similar contraventions are not repeated.
“I would like to highlight that, at no point during the period in question were our customers affected in any way.”
The Ulster was thrown into chaos this summer after a systems failure left many of its 1.9 million customers unable to see or use cash paid into their accounts.