(Reuters) - Australia and New Zealand Banking Group <ANZ.AX> said on Thursday it has reached a settlement with Australia's corporate regulator over suspected third party fraud and has agreed to pay a A$5 million ($4 million) fine.
The matter related to a number of cases where car finance brokers engaged in suspected fraud when submitting loan applications on behalf of customers to its former unit Esanda between 2013 and 2015.
ANZ said it has agreed to the fine as part of the settlement with the Australian Securities and Investments Commission. The regulator has also reviewed ANZ's proposal to remediate about 320 customers who took out car loans, which is expected to total about A$5 million.
In a statement of agreed facts, ANZ acknowledged it did not take "reasonable steps" to verify customers' financial situation in relation to 12 loan contracts submitted by three broker businesses to ANZ. The bank said it has disaccredited the individuals responsible for submitting the contracts.
"We take our responsible lending obligations seriously and we have since taken steps to strengthen our ability to prevent and detect fraud by third parties," said Fred Ohlsson, the bank's Group Executive Australia.
Major Australian banks have recently come under close scrutiny from the government, which announced an inquiry into a scandal-hit finance sector last year.
Shares of the bank were up 0.85 percent at 0347 GMT, compared with a 0.1 percent rise in the benchmark index <.AXJO>.
(Reporting by Shashwat Pradhan in Bengaluru; Editing by Richard Pullin)
