Commonwealth Bank is facing a hundreds of millions of dollars in penalties and questions over the future of its senior executives, including CEO Ian Narev, following allegations that it looked the other way as thousands of potentially illegal cash transactions were made using the bank's network of automated teller machines by criminals.

Financial intelligence agency AUSTRAC, which initiated Federal Court action against Australia's biggest bank yesterday, said CBA has ignored warnings that its ATMs were being used to funnel money to individuals connected to, charged with and convicted of crimes ranging from dealing with the proceeds of crime to drug manufacture and distribution of drugs, terrorism and terrorism financing.