Westpac Bank Photo: IC

Westpac Bank Chief Executive Officer Brian Hartzer announced his resignation on Tuesday following an unprecedented week of scrutiny for Australia's second largest financial institution.

The embattled business leader has been facing heavy pressure to stand down in recent days after the country's financial watchdog filed civil legal proceedings in Federal Court last Wednesday, accusing the bank of breaching anti-money laundering and counter-terrorism finance (AML/CTF) laws 23 million times.

Australian Transaction Reports and Analysis Center (AUSTRAC) Chief Executive Officer Nicole Rose said the decision to lodge the suit against Westpac Bank was made after a detailed investigation revealed "serious and systemic non-compliance" breaches.

AUSTRAC also alleged that the organization did not keep records relating to the origin of some international fund transfers, particularly in troubled hot spots where child exploitation is rife.

It reported the total value of these transaction was in excess of 11 billion Australian dollars (7.5 billion U.S. dollars).

"As was appropriate, we sought feedback from all our stakeholders including shareholders and having done so it became clear that board and management changes were in the best interest of the bank," Hartzer said in a statement lodged to the Australian Securities Exchange.

"As CEO I accept that I am ultimately accountable for everything that happens at the bank. And it is clear that we have fallen well short of what the community expects of us, and we expect of ourselves."

In response to the accusations, Australian Attorney-General Christian Porter said failing to abide by money-laundering laws has the potential to facilitate "the most horrendous crimes."

"Anyone who breaches money laundering laws and therefore allows money to be laundered, has -- just as a matter of fact and common sense -- contributed to the facilitating of international and domestic crimes of a variety of types," he told 6PR, Known as 882 6PR which is a commercial radio station based in Perth, western Australia, last week.

"The reason people launder money is to hide the profits of crime and criminality and to fund further crime and criminality, which is why we have such strong laws, such strong penalties and why the government takes such an incredibly robust approach to money laundering."

Westpac Bank's current Chief Financial Officer Peter King is now set to take over on Dec. 2.

Hartzer will receive a payout of 2.69 million Australian dollars (1.82 million U.S. dollars).