Regulators announced Monday that the Commonwealth Bank of Australia (CBA) would face an ethics probe after the lender was accused of not doing enough to prevent money laundering.

The Australian Prudential Regulation Authority (APRA) said in a statement the independent inquiry would focus on governance, culture, accountability frameworks and practices at the nation's biggest bank.

APRA Chairman Wayne Byres said that although the lender was "well-capitalized and financially sound," issues surrounding CBA had raised concerns and damaged the bank's reputation and public standing.

The lender had been hit by accusations from regulators that it failed to prevent its automatic deposit machines from being used 53,000 times for money laundering by criminal gangs and terrorist groups.

Insufficient controls

CBA is potentially facing billions of dollars in fines from a court case brought against it by regulator ASTRAC. It is alleged criminals deposited more than the legal 10,000-Australian-dollar limit in the machines to transfer millions overseas.

Chief Executive Ian Narev announced he would resign by June 30, 2018, as a result of the scandal.

Australia's largest lender by market capitalization has not only been marred by recent allegations of money laundering, but also by a series of scandals over poor financial planning advice and insurance payouts.

hg/jd (AFP, dpa)