Standard Chartered warned it could face major fine running into millions of dollars by New York financial regulator for failing to control anti-money laundering practices.

The British bank revealed that it is negotiating with the New York’s Department of Financial Services for a settlement, which may also include remedial action and an extension of a two-year monitoring period.

The bank said that some problems in its surveillance system, which is part of its anti-money laundering systems and controls, might have failed to reject risky transactions executed through its American operations, as reported by the New York Times.

In 2012, the US state and federal authorities imposed a monetary penalty of $667m (£396.26m) against StanChart for violating US sanctions by hiding transactions linked to Iran.

The suspected computer breakdown, a potential case of corporate recidivism, came to light as an independent monitor went through Standard Chartered’s records in recent months and found that millions of transactions that should have been flagged for further review were cleared by the lender.

People familiar with the matter were quoted by the New York Times as saying that Standard Chartered chief executive Peter Sands argued that the computer errors were technical problems rather than deliberate attempts to flout the law.

It is not only StanChart that is feeling the heat from US regulators for breaking sanctions, other European banks HSBC, Barclays and UBS and BNP Paribas were fined, too.