THE Commonwealth Bank of Australia boss has warned people against jumping to conclusions after it was accused of more than 53,000 breaches of money laundering and terrorism financing laws.

“I understand there is very little goodwill for banks in general, and for CBA in particular, so when something like this happens people jump to conclusions,” Ian Narev told The Australian in an article published on Monday.

The federal government’s financial intelligence unit AUSTRAC last week launched civil proceedings in the Federal Court against CBA. It’s accused the bank of systemic failure to comply with anti-money laundering and counter-terrorism financing laws.

CBA said in a statement on Monday it was taking AUSTRAC’s allegations seriously and admitted “mistakes can be made”. “In an organisation as large as Commonwealth Bank, mistakes can be made. We know that because we are a big organisation, these mistakes can have significant impact,” it said.

It pointed to a coding error in its Intelligent Deposit Machines between 2012 and 2015, when it was discovered. “The vast majority of the reporting failures alleged in the (AUSTRAC) statement of claim relate specifically to this coding error,” it said.

The bank said that when it first rolled out the IDMs in 2012, they were providing the correct Transaction Threshold Reports (TTRs) for cash deposits of $10,000 or more. It said the issue began after an “unrelated software update” to the machines in late 2012.

“Following the software update, a coding error occurred which meant the IDMs did not create the TTRs needed,” the statement said.

“This error became apparent in 2015 and within a month of discovering it, we notified AUSTRAC, delivered the missing TTRs and fixed the coding issue. The vast majority of the reporting failures alleged in the statement of claim (approximately 53,000) relate specifically to this coding error. We recognise that there are other serious allegations in the claim unrelated to the TTRs.”

CBA releases its full year results on Wednesday. On Friday its shares closed down 3.9 per cent, wiping about $5.5 billion off its market value. CBA could face a maximum penalty of $18 million for each of the 53,700 contraventions, if found guilty — a total of around $960 billion.

The bank has countered that any potential penalty could be as low as $18 million, arguing that each of the contraventions “could be considered to arise from a single course of conduct to the extent that they emanated from the same systems error”.

“Ultimately, a Court will seek to ensure that, overall, any civil penalties are just and appropriate and do not exceed what is proper having regard to the totality of established contraventions,” it said.

The case is already making waves in Federal Parliament.

South Australian Senator Nick Xenophon on Sunday floated introducing legislation to apply criminal sanctions, including jail terms, to the executives of banks “who systemically fail to abide by the rules” on money laundering and terror financing.