US regulators are ordering the Bank of Montreal, the fourth largest bank in Canada by assets, to take steps to correct lapses in oversight that could allow the bank to be used for money laundering.

The Federal Reserve announced an agreement with the bank. The Fed cited procedural deficiencies to prevent money laundering in the bank and its Chicago branch.

No financial penalty was imposed. The bank agreed to submit detailed plans to the Fed and to Illinois regulators for strengthening its programmes and fixing problems.

The remedial actions "are well under way," Bank of Montreal spokesman Paul Deegan said in a statement.

The bank is "fully committed to the highest standards of regulatory compliance" with anti-money laundering rules in all of the jurisdictions in which it operates, he said.-Reuters