SYDNEY, October 24, 2025 – Australia’s Federal Court imposed a A20 million (13 million) penalty on Westpac Banking Corp’s (WBC.AX) mortgage unit for widespread home loan misconduct. The fine highlights ongoing regulatory scrutiny facing Australia’s major banks and could impact investor confidence in the sector’s compliance controls.
- RAMS unit fined A20 million for systemic loan failures
- Staff submitted false payslips, inadequate verification processes identified
- Westpac cooperated with ASIC throughout the investigation process
Market reaction & context
The penalty against Westpac’s RAMS Home Loan unit represents the latest in a series of regulatory actions against Australia’s “Big Four” banks 1. Westpac has faced cumulative penalties exceeding 113 million from multiple Australian Securities and Investments Commission (ASIC) actions since 2022 9.
The misconduct involved staff submitting false payslips and inadequate verification processes, with RAMS lacking proper checks and balances 2. The now-closed mortgage business operated without sufficient oversight controls during the period of violations.
Detailed analysis
The Federal Court penalty was agreed upon by both Westpac and ASIC following investigations into systemic failures within the RAMS operation 6. The regulatory action focused on the unit’s inability to maintain adequate loan origination standards and verification procedures.
RAMS Home Loan business, which Westpac has since closed, faced scrutiny for allowing staff to process applications with falsified income documentation. The misconduct undermined lending standards during a period when Australian regulators were tightening oversight of mortgage practices.
Outlook & management response
Westpac said the company “cooperated with ASIC throughout the investigation” process 4. The bank has implemented enhanced compliance measures following the closure of the RAMS unit and the identification of the systemic issues.
The penalty reflects broader regulatory pressure on Australian banks to maintain robust lending standards amid concerns over mortgage market practices. Financial institutions face increased scrutiny over loan origination processes and staff conduct in retail banking operations.
Conclusion
The A20 million fine adds to Westpac’s regulatory burden but may provide closure on legacy issues within the shuttered RAMS unit. Investors will monitor whether the bank’s enhanced compliance framework prevents similar violations across its remaining mortgage operations.
The action demonstrates ASIC’s continued focus on banking sector accountability following years of misconduct revelations across Australia’s major financial institutions.
Not investment advice. For informational purposes only.
References
1“Australia’s Westpac unit fined 13 million for home loans misconduct”. Reuters. Retrieved October 24, 2025.
2“Australian court fines Westpac mortgage unit US13m for home”. The Edge Markets. Retrieved October 24, 2025.
3“Australian court fines Westpac mortgage unit 13 million for home loans misconduct”. MarketScreener. Retrieved October 24, 2025.
4“Westpac says RFG cooperated with ASIC throughout investigation”. MarketScreener. Retrieved October 24, 2025.
5“Fed to hand banks a win with proposed ‘stress test’ overhaul”. Reuters. Retrieved October 24, 2025.
6“Westpac, ASIC ask court for 20m fine over RAMS misconduct”. Australian Financial Review. Retrieved October 24, 2025.
7“Westpac Faces 20M Fine Over RAMS Failures”. The Aussie Corporate. Retrieved October 24, 2025.
8“NatWest earnings soar after 600 roles cut across the business”. Yahoo Finance UK. Retrieved October 24, 2025.
9“Westpac penalised 113 million after multiple ASIC legal actions”. ASIC. Retrieved October 24, 2025.