The country's financial intelligence agency launched proceedings on Thursday against Commonwealth Bank for 53,700 alleged breaches.

The proceedings relate to the bank's intelligent deposit machines (IDMs), which were allegedly used by criminal syndicates to launder money.

The bank could face huge financial penalties over the breaches.

The Australian Transactions Reports and Analysis Centre (Austrac) said the machines facilitated anonymous cash deposits, because the cardholder's details are not known to Commonwealth Bank unless he or she is a customer.

The machines can accept up to 20,000 Australian dollars (£11,976; $15,845) per cash transaction and there is no limit on the number of daily transactions.

The machines count the deposits and instantly credit them to the nominated account, making them available for immediate transfer domestically or overseas.

Late reports

Austrac says that between 2012 and 2015, Commonwealth Bank consistently failed to meet deadlines to report cash transactions of more than 10,000 Australian dollars or more.

These 53,506 transactions had a total value of about 624.7m Australian dollars.

The agency accused the bank of failing to carry out a money-laundering and terrorism financing risk assessment before it rolled out the machines in 2012, and failing to properly monitor accounts that might have used the machines.

The bank faces a maximum penalty of 18m Australian dollars for each of the 53,700 alleged breaches.

Austrac also alleged the Commonwealth Bank failed to report suspicious matters either on time or at all involving transactions totalling more than 77m Australian dollars.

'Cuckoo smurfing'

The suspicious matters involved five criminal syndicates, including two which were allegedly laundering the proceeds of drug money.

Another was a so-called "cuckoo smurfing" operation, which is a form of money laundering that makes a cross-border transaction unnecessary to move money overseas.

Austrac says the bank failed to monitor some accounts even after it became aware of money-laundering concerns.

The bank said it was reviewing the nature of the proceedings.

Commonwealth Bank said it had been in discussions with Austrac for an extended period and had cooperated fully with their requests.

The bank said it reports over four million transactions to Austrac every year in an effort to combat suspicious activity, and had invested more than 230m Australian dollars in its anti-money laundering processes and systems.