The financial regulator is taking action against Westpac after the bank breached liquidity standards and was found to have an immature and reactive risk culture.
The Australian Prudential Regulation Authority on Tuesday said the breaches, since rectified, related to funding and loan products last year and this year.
APRA said while it did not have concerns about Westpac’s liquidity, the breaches showed weakness in risk management.
The regulator has ordered the bank to have third party reviews of its liquidity reporting and risk management.
Westpac must also add 10 per cent to the net cash outflow of its liquidity coverage ratio.
Chief executive Peter King said the bank accepted the need to work faster to address its shortcomings.