Coutts, the 320-year old private bank famous for handling the finances of the Queen, has been fined £8.75m late on Monday by the FSA for money laundering violations in its dealings with high risk customers.

The RBS-owned bank, which specialises in private banking and wealth management, was found to suffer “serious and systematic” failings, which were “allowed to persist for almost three years,” according to the FSA.

Investigators found issues in almost three quarters of the client files it scrutinised. The problems discovered included lack of information gathering to establish the source of the money and failing to closer inspect customer transaction in customer accounts.

Coutts would have paid the higher fine of £12.5m if it had not chosen to settle out of court early.