The main finance regulator has launched civil proceedings against Commonwealth Bank for 53,700 contraventions of the Anti-Money Laundering and Counter-Terrorism Financing Act.

The bank is accused of failing to report more than half a billion dollars’ worth of suspicious transactions, each valued at over $10,000 each.

There is a maximum penalty of up to $18 million for each of the 53,700 contraventions.

Commonwealth Bank says it takes its regulatory obligations extremely seriously and has launched a review of its compliance systems.

AUSTRAC says most of the deposits were made using the bank's intelligent deposit machines (IDM), which were first rolled out in 2012.

The regulator says over $89 million in cash was deposited in the machines between June 2012 and November 2012, but cash deposits were up to $5.8 billion in the six months from January 2016 to June 2016.

AUSTRAC alleges CommBank did not take steps to mitigate or manage the risks even after it became aware of the suspected money laundering.

It also says the bank failed on numerous occasions to report suspicious matters either on time or at all.

The bank says it is fully cooperating with AUSTRAC’s requests. 

“We take our regulatory obligations extremely seriously and we are one of the largest reporters to AUSTRAC. On an annual basis we report over four million transactions to AUSTRAC in an effort to identify and combat any suspicious activity as quickly and efficiently as we can,” it said in a statement.

“On an annual basis we report over 4 million transactions to AUSTRAC in an effort to identify and combat any suspicious activity as quickly and efficiently as we can.

“Money laundering undermines the integrity of our financial system and impacts the Australian community's safety and wellbeing.

“We will always work alongside law enforcement, intelligence agencies and government authorities to identify, disrupt and prevent this type of activity.”