30 Unreported Cash Transactions Among South Korea’s Nonghyup Bank Violations
Key Facts
South Korea’s Financial Supervisory Service notified Nonghyup Bank on 26 October of a severe institutional warning, classified as a disciplinary measure, over violations involving inspection records, customer verification and reporting large cash transactions. The agency said the bank failed to report 30 cash transactions, each worth 10 million won or more, to the Korea Financial Intelligence Unit. The unreported transactions spanned January 2023 to March 2025. The penalty applied to the bank itself, alongside disciplinary measures against employees, and the agency notified it of requirements to improve institutional controls. The case highlights the breadth of the violations, from financial reporting duties to the bank’s handling of regulatory inspections.
According to the Financial Supervisory Service, the bank submitted customer verification records and other inspection data after manipulating them during a surprise inspection of anti-money laundering operations last year. The bank also deleted, on its own initiative, verification records requested by inspectors that related to customers verified through a third party. The agency said the bank reset the permissions of its anti-money laundering and integrated operations systems, restricting the inspection team’s access to them. The agency described the conduct as systematic obstruction of the inspection, combining altered records with limits on inspectors’ ability to access the requested data. This aspect adds a regulatory dimension to the violations, as the issue went beyond shortcomings in customer verification procedures.
The agency found repeated obstruction of inspections during a regular examination in 2024, when electronically entered data was altered and customer verification materials were submitted in a misleading manner. The incident shows that inspectors’ findings were not limited to the surprise inspection of anti-money laundering operations, but also covered the subsequent regular examination. According to the agency, the violations concerned verification duties when opening new accounts or conducting one-off financial transactions. Those duties covered transactions through branches and non-face-to-face channels, as well as transactions conducted through third parties. The violations therefore extended across multiple channels customers use to complete transactions.
The agency said the bank changed additional information about customers at high risk of money laundering without verifying it. It also failed to tighten verification procedures when those customers returned to conduct financial transactions. These findings link updates to high-risk customers’ files with the subsequent monitoring of their transactions, two aspects of the verification requirements cited by the agency. Alongside the institutional warning, measures included salary reductions for 6 employees, reprimands for 7 and warnings for 2. The penalties also included two matters requiring self-remediation, and the agency notified the bank of 9 institutional improvement requirements.