VATICAN CITY (Reuters) - Pope Francis has decided that the troubled Vatican bank, which he had in the past not excluded closing, will remain operative and he has approved recommendations for its future, the Vatican said on Monday.

The bank, formally known as the Institute for Works of Religion (IOR), has been beset by a series of scandals in past decades, including allegations of money-laundering.

"The IOR will continue to serve with prudence and provide specialised finiancial services to the Catholic Church worldwide," a statement said.

The statement said the Pope had approved a proposal on the future of the IOR presented by various commissions and by Australian Cardinal George Pell, head of a new Vatican department known as the Secretariat for the Economy.

It said a "plan to ensure that the IOR can fulfil its mission as part of the new financial structures of Holy See" will be drawn up for the pope, who has stressed that thebank be transparent.

In the past year under the leadership of its German president Ernst von Freyberg, the IOR has closed hundreds of accounts, instituted strict anti-money laundering regulations and launched several investigations into suspicious activities.