The Financial Conduct Authority (FCA) alleges that “increasingly large cash deposits” were made into a NatWest customer’s account, with around £365 million paid in – of which some £264m was in cash.
It claims that NatWest’s systems and controls failed to properly monitor and scrutinise this activity, which took place between November 11 2011 and October 19 2016.
NatWest is due to appear at Westminster Magistrates’ Court on April 14.
It marks the first time the FCA has launched criminal prosecution under the money laundering regulations and the first time the rules have been used to prosecute a bank.
The FCA said the money laundering rules require firms to “determine, conduct and demonstrate risk sensitive due diligence and ongoing monitoring of its relationships with its customers for the purposes of preventing money laundering”.
No individuals are being charged as part of the proceedings.
The regulator first alerted NatWest Group of the investigation in July 2017.
NatWest Group, which is 62 per cent owned by the UK government after a mammoth bailout at the height of the financial crisis more than a decade ago, said it had been co-operating with the FCA’s investigation to date.
The banking group said: “NatWest Group takes extremely seriously its responsibility to seek to prevent money laundering by third parties and accordingly has made significant, multi-year investments in its financial crime systems and controls.”