The German Federal Financial Supervisory Authority (BaFin) has issued an order directing Standard Chartered Bank AG, headquartered in Frankfurt am Main, to ensure that its business organization is properly organized.

Furthermore, the institution must hold additional capital until the organizational deficiencies are rectified.

A special audit conducted in the first quarter of 2025 revealed that Standard Chartered Bank AG’s business organization was not properly organized in some of the audited areas. The processes affected included loan origination and the processes for determining risk-bearing capacity. The institution thus violated the provisions of the German Banking Act (KWG).

Proper business organization is intended to ensure that credit institutions comply with legal regulations and take all necessary business actions. Section 25a, paragraph 1 of the German Banking Act (KWG) governs how this is to be achieved. An essential component of proper business organization is appropriate and effective risk management.

If BaFin concludes that an institution’s business organization has deficiencies, it can take action. The legal basis for this is Section 25a, Paragraph 2, Sentence 2 of the German Banking Act (KWG).

BaFin can, for example, order the institution in question to rectify the deficiencies. It can also require the institution to hold additional equity capital beyond the statutory requirements. BaFin did both of these things in the case of Standard Chartered Bank AG.

These measures have been legally binding since November 30, 2025, and December 6, 2025, respectively.