French prosecutors are demanding punishment for Royal Bank of Canada’s (RBC) Bahamas wealth management arm as it faces a tax fraud and money laundering probe.

The Toronto-based lender has been alleged of criminal charges for complicity in tax fraud and aggravated money laundering tied to a trust managed by the Bahamas unit, reports Bloomberg.

The bank’s Bahamas division however, has already made a submission to the investigating judge citing reasons for why the unit should not be charged.

Bank spokeswoman Claire Holland said in a statement, "We are aware that a French prosecutor has recommended that a judge bring charges in France against RBC Trust Company (Bahamas) Limited, and other third parties, which we strongly contest. We are awaiting the judge’s decision and it is important to note that we have not been charged in this matter."