DBS Bank and the Singapore branch of UBS said yesterday that they will take action against staff who were involved in lapses in relation to 1Malaysia Development Berhad-related fund flows.
The statements came after both banks were fined by the financial regulator for breaches in anti-money laundering laws.
DBS was hit with a $1 million penalty for 10 breaches of these laws while UBS must fork out $1.3 million for 13 violations.
The lapses involve weaknesses in corroborating the source of funds, inadequate scrutiny of customer transactions and failure to file timely suspicious transaction reports.
The Monetary Authority of Singapore (MAS) had earlier said DBS and the Singapore branches of UBS and Standard Chartered Bank were used as "conduits" for a complex web of global transactions involving entities and individuals in Singapore, the United States and Hong Kong.
It added it did not detect pervasive control weaknesses at DBS and UBS, finding instead the lapses were due to specific bank officers failing to carry out their duties effectively.
It admonished the two banks and told management to address the control lapses and take disciplinary action against the staff involved.
DBS did not say how many staff members would be penalised.
Its spokesman noted: "Any staff we feel could have done a better job... will be held accountable. In general, there is a wide array of possible consequences, ranging from a warning, bonus impact to dismissal.
"We should have taken more rigorous action with respect to the questionable activity, even if it was intentionally designed to conceal another purpose.
"These actions are for lapses which occurred in 2013 and 2014. We have made many enhancements since then and are in a materially better position than before."
The spokesman said the bank will donate "profits attributable to our shortcomings to a worthy cause".
UBS said it was "disappointed" it had not done more to detect the breaches earlier. The bank said it is strengthening its controls and action will be taken against individuals responsible for the lapses.
"UBS is determined not to be used as a platform for financial crime," it said.
"We will donate all profits from this account to the establishment of an industry-wide anti-money laundering programme to be run by an independent educational body to help combat financial crime and reinforce Singapore's status as a financial centre which adheres to the highest standards."