The amount is about double the amount that the Australian lender had provisioned for when the matter began going through the legal process.

Commonwealth Bank of Australia has agreed to pay a civil penalty of A$700 million ($535.2 million) to authorities for failing to immediately report more than 53,500 suspicious transactions, one of the worst financial scandals in the country’s history and part of a wider set of problems hitting Australian banking.

The lender yesterday said it had entered into an agreement with Austrac, the Australian Government’s financial intelligence agency, to resolve the civil proceedings commenced by the watchdog in the Federal Court of Australia on 3 August last year.

The agreement, which still has to be cleared by a court, will involve the largest such fine of its kind in Australian history, reports said.

The A$700 million figure is about double the amount the bank had provided for when regulatory proceedings into the problems were under way.

And the development will, CBA hopes, draw a line under a scandal that has seen the reputation of Australian financial firms tarnished in recent months. In December, Prime Minister Malcolm Turnbull set up a royal commission inquiry to investigate the scale of wrongdoing. There have been misconduct problems at a number of businesses, such as AMP, the asset management group.

CBA will pay a civil penalty of A$700 million together with Austrac’s legal costs of A$2.5 million.

The bank has “admitted further contraventions of Australia’s Anti-Money Laundering and Counter-Terrorism (AML/CTF) Act, beyond those already admitted, including contraventions in risk procedures, reporting, monitoring and customer due-diligence, the bank said in a statement on its website yesterday.

“This agreement, while it still needs to be approved by the Federal Court, brings certainty to one of the most significant issues we have faced,” Matt Comyn, chief executive, said. (Comyn took over as chief executive after his predecessor Ian Narev brought forward his retirement last year. The bank has also seen a number of senior executives depart.)

“While not deliberate, we fully appreciate the seriousness of the mistakes we made. Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward. On behalf of Commonwealth Bank, I apologise to the community for letting them down,” Comyn said.

“We are committed to build on the significant changes made in recent years as part of a comprehensive program to improve operational risk management and compliance at the bank. To date we have spent over $400 million on systems, processes and people relating to AML/CTF compliance and will continue to prioritise investment in this area. “We have changed senior leadership in the key roles overseeing financial crimes compliance supported by significant resources and clear accountabilities,” he added.

The bank said it had put aside money for an estimated penalty of A$375 million in the half year ending 31 December 2017 at which time the bank noted the proceedings were complex and ongoing, and the ultimate penalty determined by the Court may be higher or lower than the amount provided for.  CBA will recognise a $700 million provision in its financial statements for the full year ending 30 June 2018 which will be announced on 8 August.

At the heart of the affair are late filings of 53,506 Threshold Transaction Reports for cash deposits through Intelligent Deposit Machines (IDMs). The bank also inadequately followed risk assessment requirements on IDMs on 14 occasions. Transaction monitoring did not operate as intended on a number of accounts from October 2012 and October 2015. Some 149 Suspicious Matter Reports were filed late or were not filed as required. Due diligence tests on clients were broken in the case of 80 customers.