The Prime Minister has urged Westpac’s board to “reflect deeply” on the future of chief executive Brian Hartzer after revelations of the bank’s alleged enormous breaches of money-laundering laws.

Westpac shares dropped to a nine-month low on Thursday after Scott Morrison’s comments, which followed Wednesday’s announcement the bank was being sued for money laundering and potentially facilitating payments for child exploitation.

Westpac stock fell 3.4 per cent at the start of trade on Thursday, on top of heavy falls on Wednesday. As much as $6.2 billion has been wiped off the market capitalisation of Australia’s second largest bank since AUSTRAC’s allegations became public.

The latest fall suggested investors were unconvinced by Mr Hartzer’s response to the crisis in a hastily arranged media briefing late on Wednesday. It came after the financial crime watchdog accused the bank of breaking money laundering and counter-terrorism financing laws more than 23 million times.

AUSTRAC’s claims include the bank knew since 2013 of child exploitation risks associated with frequent small payments to South-East Asia but did not act appropriately until 2018 and still does not monitor all channels for transfers potentially linked to the live-streaming of child abuse.

AUSTRAC is seeking civil penalties in relation to 23 million breaches.

On Thursday, Mr Morrison said Mr Hartzer’s future was in the hands of the board.

“They should be taking this very seriously, reflecting on it very deeply, and taking the appropriate decisions for the protection of people’s interests in Australia,” Mr Morrison told ABC radio on Thursday.

Mr Hartzer, who has led Westpac since February 2015, said he was “utterly horrified” by the allegations and accepted “the need for accountability”. He has refused to say whether he might quit.

Mr Hartzer, who appeared before MPs in Canberra only a fortnight ago, blamed a combination of technical and human failings and said he had become aware of the matter only a month ago.

Mr Morrison said AUSTRAC had done its job and now the board and executive of Westpac needed to do the same.

“These are some very disturbing transactions involving despicable behaviour,” he said.

Labor frontbencher Tanya Plibersek said the revelations were shocking, with the links to child exploitation particularly concerning.

“It can’t be swept under the carpet and the management of the bank really do need to take responsibility for what’s gone on on their watch,” she told Sky News.

Commonwealth Bank’s then CEO quit in 2017 after AUSTRAC accused it of 53,000 breaches of money laundering and terrorism-funding laws.

CBA eventually settled the case for an Australian corporate record $700 million. That suggests Westpac could face a huge fine – AUSTRAC has applied to the Federal Court for civil penalty orders relating to 23 million breaches of law.

Westpac has already provisioned $1.4 billion for customer remediation in the past three years for issues including the fees-for-no-service scandal aired at last year’s financial services royal commission.

Mr Hartzer told the House of Representatives’ economics committee on November 8 that Westpac could not rule out additional charges beyond FY20.

Rival National Australia Bank last week admitted it faced a huge fine for multiple possible breaches of counter-terrorism and anti-money laundering laws.

Westpac shares dropped as low as $24.80 in early trade on Thursday, their lowest since early February.

At 11.30am (AEDT), they had rallied a little but were still 2.5 per cent lower for the day at $25.03.

-with AAP