By Lawrence White

HONG KONG (Reuters) - Banks are being penalised too harshly for lapses in anti-money laundering efforts, Standard Chartered Plc's head of Asia operations said - the second senior bank executive this week to voice frustration over what many in the industry see as overzealous regulation.

StanChart said on Wednesday that a computer error in a surveillance system which forms part of its anti-money laundering controls was likely to lead to a fine and remedial action.

It is also set to result in an extension of a two-year monitoring period imposed on the bank in 2012 for breaking U.S. sanctions by hiding transactions linked to Iran.

"Banks have been asked to play the role of policing anti money laundering. That's the real purpose of all these sanctions and surveillance systems and all that," Standard Chartered Asia CEO Jaspal Bindra said in an interview with Reuters on Thursday.

"We are supposed to police that our counterparties and clients are not money laundering, and if when we are policing we have a lapse, we don't get treated like a policeman who's had a lapse, we are treated like a criminal," Bindra said.

Standard Chartered later distanced itself from his comments.

"We want to be clear that Jaspal Bindra's quote does not represent the bank's view on anti-money laundering or conduct regulation. As Group Chief Executive Peter Sands said yesterday, Standard Chartered is fully committed to playing our role in supporting the regulatory conduct agenda and the fight against financial crime," StanChart spokesman Jon Tracey wrote in an email.

Regulators worldwide are cracking down more harshly on failures in money laundering controls, with U.S. authorities imposing increasingly large fines, after being accused of a soft-touch approach.

They toughened their stance in 2012, when HSBC paid a hefty $1.9 billion (1.12 billion pounds) to settle U.S. charges that it allowed Mexican and Colombian cartels to launder drugs proceeds and StanChart paid a combined $670 million in settlements to U.S. authorities over failures in anti-money laundering controls.

HSBC has since pulled out of some business areas and countries, including Panama, to cut the risk of future problems.

Bindra's remarks follow comments on Monday by HSBC Chairman Douglas Flint, who argued that regulators' zeal to punish wrongdoing was putting the bank's staff off taking reasonable business risks. Rules that were too harsh could hurt lending in areas such as commercial banking where products can be complicated, he said.

People in the industry have also spoken of unintended consequences from the regulatory clampdown, including the risk that lending will be cut to people or businesses in poorer countries.

Bindra said StanChart has addressed its compliance problems by hiring more staff and embarking on a multi-year program to make all 89,000 of its employees more aware of the importance of compliance and anti-money laundering.

The new fine could be between $100 million and $340 million, a source familiar with the matter has previously told Reuters.

"The issue is not so much about whether the U.S. is wrong or right, you have fines in every country, every regulator has fines, but it's the level of fines that is quite difficult for banks," Bindra said.

U.S. authorities have meted out penalties on at least 10 European banks and financial firms for violating U.S. sanctions in regard to countries that include Iran, Sudan and Cuba.

In its 2012 case, StanChart paid a combined $670 million in settlements to U.S. authorities. Standard Chartered has made little comment on those fines since having to apologise in March 2013 for comments made by its chairman.

The U.S. Justice Department and the Manhattan District Attorney's Office forced the bank to retract and apologise for comments made by Chairman John Peace, who had told reporters the bank "had no willful act to avoid sanctions". That contradicted the bank's acceptance of its crimes, the U.S. authorities said.

(Reporting by Lawrence White; additional reporting by Steve Slater in London; editing by Edwina Gibbs and Tom Pfeiffer)