Under the deal CBA, which has admitted to 53,506 breaches of anti-money laundering and counter-terrorism laws, will also see it pay $2.5 million in legal fees, subject to Federal Court approval.

“I congratulate AUSTRAC, its CEO and legal team for their engagement with me which has enabled this matter to be resolved in such a successful and speedy way,” Federal Attorney-General Christian Porter said in a statement today.

Home Affairs Peter Dutton said CBA’s disregard of its anti-money laundering and counter-terrorism obligations had allowed criminals to exploit its systems and put the Australian community at risk.

“This very large number of breaches over several years is unacceptable and should never have been allowed to happen,” Dutton said.

Treasurer Scott Morrison said the law was non-negotiable, especially when it came to the country’s largest financial institutions.

“The government is serious about enforcing any breaches,” he said.

“Banks should be leaders in ensuring their systems cannot be compromised by criminals seeking to launder money or finance terrorist activities.”

Opposition assistant treasurer Andrew Leigh said the size of the fine reflected the gravity of CBA’s wrongdoing.

“Again it reinforces the call we have been making for the last two years for a royal commission,” Leigh told Sky News.

“We have seen from CBA alone, scandals ranging from children’s bank accounts to charging dead people for work that hadn’t been done.”

CBA has admitted to the 53,506 breaches of which it was accused by the regulator – and to further contraventions – bringing to an end a scandal that led to Ian Narev’s departure as chief executive.

The agreement, which also includes CBA paying $2.5 million in legal fees, is subject to Federal Court approval.

The civil penalty exceeds the $375 million that CBA had set aside for the proceedings when it announced its first-half results in February, but falls short of the most dramatic analyst predictions of more than $1 billion.

CBA chief executive Matt Comyn said the lender had not deliberately breached the law by failing to provide the regulator with timely notification of potentially suspicious transactions, but admitted that the bank’s risk procedures and due diligence were not up to scratch.

“While not deliberate, we fully appreciate the seriousness of the mistakes we made,” Comyn said in a statement on Monday.

“Our agreement today is a clear acknowledgement of our failures and is an important step towards moving the bank forward.”

CBA will record a $700 million provision in its results for the year to June 30, which will be announced on August 8.

Comyn, who was promoted to replace Narev in April, said CBA had spent more than $400 million on anti-money laundering compliance measures.

“Banks have a critical role to play in combating financial crime and protecting the integrity of the financial system,” Comyn said.

“We have also agreed with AUSTRAC that we will work closely together based on an open and constructive approach.”

– AAP