British bank Standard Chartered is hoping to reach a settlement within days over charges it hid transactions tied to Iran.
It is set to resume talks with US regulators today, sources familiar with the situation said.
The London-based bank's US legal team have got as far as discussing an amount with regulators, indicating progress has been made before a Wednesday deadline, the sources told Reuters.
The bank could be forced to pay a fine of up to $1 billion to settle the charges, analysts said last week.
But there has been speculation that this figure could be higher to assuage the New York banking regulator pressing the case.
New York's Department of Financial Services alleged last week that Standard Chartered hid transactions tied to Iran and the regulator's head, Benjamin Lawsky, ordered the bank to explain why it should not lose its licence at a hearing scheduled for Wednesday.
The bank is awaiting information on whether executives will be required to attend and chief executive Peter Sands remains in Britain, a source close to the situation said.
Britain's financial regulator said it remained in close contact with the bank and US regulators. Politicians have also been in close contact over the affair as the loss of its New York banking licence would be a devastating blow for Standard Chartered, effectively cutting off direct access to the US bank market.
Standard Chartered vehemently disagrees with the agency's allegation the bank improperly processed $250 billion tied to Iran, which Lawsky cited in his order issued August 6. The heart of his order, however, alleges the bank violated state laws when it concealed records of transactions from bank examiners.
The talks could still collapse, and the hearing also could be postponed to allow more time for negotiations.
The bank, meanwhile, was already cooperating in a separate probe dating to 2010 that included the US Justice Department and the Manhattan district attorney. That investigation is aimed at determining whether Standard Chartered violated US sanctions laws and talks on a settlement have been taking place separately from the state discussions.
A settlement with New York would end a period of turmoil for the bank and law enforcement officials and likely would result in a multimillion-dollar fine for Standard Chartered. A settlement with federal officials could also result in a multimillion-dollar fine.
Lawsky's order cited communications between Standard Chartered officials about the reputational and legal threats to the bank if it kept doing business with Iranian clients. Lawsky's department and Standard Chartered declined to comment.
Faced with similar accusations, some banks prefer to settle quietly. Barclays, Credit Suisse Group, Lloyds Banking Group, JP Morgan Chase & Co and ING Bank had agreed in prior years to settlements totalling nearly $2 billion into how those banks allegedly processed money or assets tied to sanctioned countries.
Standard Chartered, by comparison, said last week that Lawsky's "interpretation" that the bank had improperly handled Iranian transactions was "incorrect as a matter of law".
Lawsky's office alleged the bank had hidden from regulators some $250 billion in improper transactions tied to Iran. The bank said that total amount that did not adhere to US sanction laws was less than $14m.
