Oct 21 (Reuters) - Australia's financial regulator said on Wednesday it has increased the minimum liquidity requirement for Bendigo and Adelaide Bank Ltd BEN.AX until further notice after it failed to comply with liquidity standards in the past.
It comes after Bendigo and Adelaide informed the regulator in September of multiple breaches to a liquidity reporting law, it said.
The Australian Prudential (LON:PRU) Regulation Authority (APRA) said in a statement it would require the bank to set aside an additional 10% on top of the liquidity cover ratio (LCR) it calculated until the "short-comings have been rectified to APRA's satisfaction."
"Although Bendigo and Adelaide Bank's breaches don't impact the overall soundness of its liquidity position, APRA takes any breaches of its prudential requirements seriously," said APRA Deputy Chair John Lonsdale, according to the statement.
Bendigo and Adelaide Bank said in a separate statement they had rectified the issues and reviews were underway.
Australian banks have faced increased scrutiny from regulators after a government inquiry found rampant fee-gouging and predatory sales tactics to inflate bonuses, leading to multiple lawsuits and customer remediation charges. said on Wednesday it will require an independent review of the bank's adherence to liquidity requirements and said it was waiting for the outcome of the bank's own internal review to determine whether further action is needed.
"In taking these actions, our priority is to ensure the underlying causes of the compliance failures are properly identified and addressed," said Lonsdale.
"It also sends a message to the wider banking industry that such breaches of our prudential standards are not acceptable."