The National Australia Bank (NAB) is under investigation by the Australian Securities and Investments Commission (ASIC) for fraud involving the bank’s home loan 'introducer' program.
According to a report by news.com.au, ASIC has already taken action against implicated people, together with 60 bankers and branch managers. However, it was only recently that the corporate regulator included the bank itself in the case, well after the banking royal commission assessed the situation in March.
While ASIC Chair James Shipton is certain that NAB should face the consequences, some members of ASIC's enforcement committee contradicted his view, with one wanting to do "doing nothing" about the crisis.
The committee's chair, in the July 2018 email, further suggested that an enforceable undertaking with a community donation would be enough, stating "what do we have to lose from doing this."
Shipton said that the move did not align with his thinking or ASIC's current practice of “asking why not litigate.”
"In my view, and I expressed this when the conversation was happening, we should be pursuing much harder, much tougher action and we ultimately did," said Shipton.
The fraud and misconduct case involving sixty bankers was rooted in NAB's introducer program, which pays people outside the bank such as financial planners and accountants for successful lending referrals.
The inquiry found that several bankers produced false documents and accepted cash payments from introducers, while some staff accepted bribes for fraudulent home loans.
Responding to the issues, NAB spokesperson said the bank was cooperating with ASIC on issues related to the introducer program, including banker misconduct and ways to appease customers.