UK: Senior Manager Learning Points From FCA Decision Notice Against Sonali Bank CEO

Last Updated: 12 March 2019
Article by Daren Allen, Celyn Armstrong and Katharine Harle

Introduction and background

In a recently published decision notice, the FCA has proposed to fine Mohammad Ataur Rahman Prodhan, the former CEO of Sonali Bank (UK) Ltd (SBUK), £76,400 for anti-money laundering (AML) failings which took place between 7 June 2012 and 4 March 2014. This follows on from final notices published by the FCA in October 2016 against SBUK and its Money Laundering Reporting Officer (MLRO) imposing financial penalties of £3,250,600 and £17,900 respectively. Mr Prodhan has referred the FCA's decision to the Upper Tribunal which will determine what action, if any, is appropriate for the FCA to take. Although the notice concerns events prior to the Senior Managers and Certification Regime (SMCR) coming into force, it has potential learning points for current senior managers.

The final notice published against SBUK in October 2016 found it had breached FCA Principle 3 for having serious and systemic weaknesses in its AML controls. This included identifying issues with SBUK's senior management team and failings in its AML policies and procedures. SBUK was also found to have breached Principle 11 for failing to notify the FCA (for a period of at least seven weeks) that a significant fraud had been alleged whilst it had been under FCA investigation. In addition, SBUK's MLRO was fined for failing to exercise due skill, care and diligence in carrying out his duties and for being knowingly concerned in SBUK's breach of Principle 3. The FCA found that the MLRO had demonstrated a "serious lack of competence and capability".

The FCA, in its more recent decision notice, found that Mr Prodhan had breached APER Statement of Principle 6 which required him to exercise due skill, care and diligence in managing SBUK's business. In particular, Mr Prodhan was found to have "failed to appreciate the need to give sufficient focus to regulatory compliance and to take reasonable steps to ensure the adequacy of SBUK's AML systems and controls to prevent financial crime." The FCA also found that Mr Prodhan had been knowingly concerned in SBUK's breach of Principle 3 which requires a firm to take reasonable steps to ensure it has organised its affairs responsibly and effectively, with adequate risk management systems.

Regulatory framework

(i) Requirements on firms

Firms' AML obligations are primarily found in the Money Laundering Regulations 2017. Firms are required to carry out customer due diligence by identifying their customers and verifying those identities. In certain circumstances, firms must also take additional steps to verify a customer's source of wealth. Principle 3 requires an authorised firm to take reasonable care to organise and control its affairs responsibly and effectively, with adequate risk management systems including in relation to financial crime.

The FCA Handbook provides a large amount of detailed guidance on how firms should act in relation to financial crime risks in the Financial Crime Guide section of the FCA Handbook. In addition, the FCA regularly issues Financial Crime Thematic Reviews on particular issues (for example, on banks' control of financial crime risks in trade finance).

(ii) Requirements on individuals

During the period from June 2012 to March 2014, Mr Prodhan held the certified functions CF1 (director) and CF3 (chief executive) under the former approved persons regime. For banks, this has of course since been replaced by the SMCR which came into force in March 2016. The corresponding senior manager functions are SMF1 (chief executive) and SMF3 (executive director). In addition, banks must appoint as a senior manager the person who acts in the capacity of the MLRO (SMF17). This is no different to the position under the former approved persons regime. A key change compared to the approved persons regime is that, under SMCR, senior managers must be allocated certain prescribed responsibilities. One of these is the overall responsibility for the firm's policies and procedures for countering the risk that the firm might be used to further financial crime. This includes the risk that a firm will be used for money laundering and whoever is appointed as the firm's SMF17 will often be allocated this responsibility, although, given the responsibility is broader than just AML, this will not always be appropriate.

As mentioned above, APER Statement of Principle 6 requires an approved person to manage the business of the firm for which they are responsible with due skill, care and diligence. The equivalent requirement under SMCR can be found in Conduct Rule 2. All employees of an authorised firm, with the exception of ancillary staff, are now expected to act with due care, skill and diligence. COCON 4.1.4-8 provides guidance on this specifically for managers. In addition, senior managers are required to take reasonable steps to ensure the business they are responsible for is: (a) controlled effectively (Senior Manager Conduct Rule 1); and (b) complies with the requirements and standards of the regulatory system (Senior Manager Conduct Rule 2). Guidance on compliance with the conduct rules can be found within COCON 4.

Failings identified by the FCA and guidance on what firms should do

We set out below the key failings of Mr Prodhan and indications of the FCA's expectations as well as referring to COCON guidance that is relevant now and to events since 2016.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
20 Mar 2019, Business Breakfast, Milton Keynes, UK

Designed to bring you up to date with the latest key developments affecting your workforce.

21 Mar 2019, Business Breakfast, London, UK

Designed to bring you up to date with the latest key developments affecting your workforce.

21 Mar 2019, Seminar, Budapest, Hungary

Experiences gained, current news and novelties since the entry into force of the new Code of Civil Procedure

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Sign Up
Gain free access to lawyers expertise from more than 250 countries.
Email Address
Company Name
Confirm Password
Mondaq Newsalert
Select Topics
Select Regions
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions