Sharia-compliant financial services provider Al Rayan Bank has been handed a £4 million fine by the Financial Conduct Authority (FCA).

The FCA said that Al Rayan failed to implement adequate controls to prevent money laundering. It found that Al Rayan allowed money to pass through the bank and be used within the UK without carrying appropriate checks for a period of more than two years between April 2015 to November 2017.

Al Rayan has agreed to settle the fine and did not dispute the findings, affording it a 30 per cent discount on the fine that started life at £5.7 million.

In a statement, the FCA said: "Al Rayan was aware of these weaknesses and failed to implement effective changes to fix them, despite the FCA raising concerns about the inadequacies of their systems.”

The watchdog also said that the bank voluntarily agreed not to take on further high-risk customers after it visited in 2017, It added that the restriction has now been lifted “following improvements to the bank’s systems and controls,” but noted that the bank “remains subject to some limited restrictions while further improvements are made."

In his statement, Al Rayan Bank chief exec Giles Cunningham noted that the FCA found no evidence of money laundering or criminal activity and said that no current management staff were in senior roles at the time.

Cunningham added: "The financial penalty will have no material impact. The Bank remains well capitalised and will report very strong financial results for 2022.”

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