Canada banking regulator asks TD Bank to overhaul risk controls, Globe and Mail reports

FILE PHOTO: The Toronto-Dominion (TD) bank logo is seen outside of a branch in Ottawa, Ontario, Canada, February 14, 2019. REUTERS/Chris Wattie/File Photo

(Reuters) - Canada's banking regulator has ordered Toronto-Dominion Bank to repair the nerve centre for its risk controls, The Globe and Mail said on Wednesday.

The Office of the Superintendent of Financial Institutions (OSFI) identified deficiencies with the bank's Regulatory Compliance Management program during a recent assessment, the Canadian newspaper reported, citing two people familiar with the matter.

Some of the weaknesses detected in OSFI's evaluation of TD Bank involve the bank's anti-money-laundering controls, the two sources told Globe and Mail.

TD Bank and the OSFI did not immediately respond to Reuters' requests for comment.

OSFI's probe into TD Bank comes at a time when the bank is undergoing scrutiny from both the U.S. and Canadian government over recent allegations of drug traffickers laundering money at the bank.

The Wall Street Journal reported earlier this month that the U.S. Department of Justice (DoJ) is investigating how Chinese drug traffickers and crime groups used the Canada's second-largest lender to launder their money from fentanyl sales, following which the Canadian House of Commons finance committee said last week it would hold a meeting to discuss the allegations.

TD Bank said earlier this month that a comprehensive overhaul of its U.S. and global anti-money laundering program was well underway, adding that it had invested over C$500 million ($365.34 million) in program remediation and platform enhancements to address the issues.

($1 = 1.3686 Canadian dollars)

(Reporting by Rishabh Jaiswal in Bengaluru; Editing by Rashmi Aich)