The Bank of Italy, which regulates Italian financial institutions, said it was shutting down PrivatBank and explicitly stated that this was because of breaches of money-laundering regulations.
"The Bank of Italy has taken such a step as a result of audits conducted from 16 March to 6 April 2016, from which serious violations have emerged of the anti-money laundering law, with the risk of recurrence of irregularities," the regulator said.
The Latvian financial regulator, the Financial and Capital Markets Commission (FKTK), told LSM it had been informed of the move by the Italian authorities.
PrivatBank in Latvia is independent but part of the much larger PrivatBank International Banking Group from Ukraine and both institutions have found themselves at the center of major money-laundering allegations.
As previously reported by LSM, PrivatBank was recently subject to a record-breaking €2m fine over similar concerns, as FKTK sought to get tough.
However, even that sanction is mild compared to the swift and decisive action of Bank of Italy in simply shutting down PrivatBank's operations completely.
As well as Latvia, Ukraine and Italy, PrivatBank Latvia's web page also says it has branches in Cyprus and Portugal.