Dhaka, July 17 (bdnews24.com)—The US division of HSBC provided money and bank service to Bangladesh Islami Bank and Social Islami Bank, which a US Senate report identified as banks suspected to have involvement in raising fund for terrorist organisations.
The report published on Monday is the result of an investigation on London-based HSBC Holdings PLC by the Senate Permanent Subcommittee on Investigations.
It also said the bank's US division provided banking services to some banks in Bangladesh involved in helping al-Qaeda raise its fund, reported Al Jazeera.
bdnews24.com could not reach any senior officials by calling at the offices of HSBC, Bangladesh.
Al Jazeera carried a report on its website based on the investigation report that also revealed that the largest bank of Europe allowed money laundering for seven years in terms of having lax controls.
Not only Bangladesh, the bank provided money and banking services to some banks in Saudi Arabia suspected to have helped fund al-Qaeda, the report said.
"Lax controls at Europe's largest bank, HSBC, allowed Mexican drug cartels to launder billions of dollars through its US operations," reported Al Jazeera quoting the report.
The report says the drug cartels laundered money through the bank's US division from 2002 through 2009.
The report also says US regulators knew the bank had a poor system to detect problems but failed to take action.
The subcommittee's Chairman Senator Carl Levin blasted the federal agency supervising the bank's US operations, the Office of the Comptroller of the Currency. He said the agency "tolerated" HSBC's weak controls against money laundering for years.
According to the report, HSBC executives brushed off complaints from its employees paving ways for the problems to persist for eight years while the bank affiliates skirted US government bans against financial transactions with Iran and other countries.
HSBC released a statement saying its executives will offer a formal apology at the hearing to be held on Tuesday on the topic.
"We will apologise, acknowledge these mistakes, answer for our actions and give our absolute commitment to fixing what went wrong," the statement said.
The US justice department said it is conducting a criminal investigation into HSBC's operations but declined to confirm that the bank is in settlement talks.
HSBC's net income last year was $16.8bn. It operates in about 80 countries around the world. Its US division is among the top 10 banks operating in the United States. It has assets of roughly $210bn in its US operations.
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