SBC Middle East, based in Jersey, has been heavily criticised in a damning report from the island’s watchdog.
It found, in a sample of 100 customers, 86 were at high risk of being involved in money laundering.
The Financial Services Commission says there is no evidence staff acted dishonestly.
The bank has anti-money laundering initiatives in place, but they were deemed ineffective and further work is needed to achieve full compliance with the regulatory standards.