Standard Chartered Bank on Tuesday rejected allegations from US regulators that it hid $250 billion in transactions with Iranian banks for almost a decade in violation of US sanctions.

In the latest US move against foreign banks dealing with Iran, New York state regulators branded the lender a "rogue bank" and threatened it with fines and the suspension of its licence.

The Department of Financial Services (DFS) said the London-based giant systematically disguised foreign exchange deals with Iran that potentially opened the US banking system to terrorists and criminals.

But Standard Chartered said it "strongly rejects ... the portrayal of facts as set out" by the DFS.

"The group does not believe the order issued by the DFS presents a full and accurate picture of the facts," group secretary Annemarie Durbin said in a statement to the Hong Kong stock exchange.

Standard Chartered was ordered to appear on August 15 to explain the "apparent violations of law" and demonstrate why its licence to operate in New York should not be revoked.

"For almost 10 years, SCB schemed with the government of Iran and hid from regulators roughly 60,000 secret transactions, involving at least $250 billion," the regulator said.

Standard Chartered falsified transaction reports and obstructed oversight "in its evident zeal to make hundreds of millions of dollars at almost any cost", it added.

The transactions mainly involved US dollar transfers for state-owned Iranian banks, including the central bank, that fell under US controls aimed at undermining Tehran's alleged nuclear weapons programme.

The activity "left the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes", it said.

There was also evidence of possible illegal transactions with Libya, Myanmar and Sudan while they were under US sanctions.

The bank, which focuses on Asia, the Middle East and Africa, said it was surprised at the claims as it had informed US agencies in 2010 that it had voluntarily launched an internal compliance review.

It said the review "did not identify a single payment on behalf of any party that was designated at the time by the US government as a terrorist entity or organisation".

The bank also said it had stopped all new business with Iranian customers more than five years ago.

"The group takes its responsibilities very seriously, and seeks to comply at all times with the relevant laws and regulations," Durbin said. "We intend to discuss these matters with the DFS and to contest their position."

The bank could face steep fines if found guilty.

Standard Chartered shares plunged 7.4 percent to HK$174.20 by the break Tuesday in Hong Kong, as the broader index rose 0.29 percent. In after-hours trade in London it tumbled 6.19 percent to 14.70 pounds.

Justin Harper, market strategist for IG Markets in Singapore, said being tagged a "rogue bank" by a US regulator was a severe blow.

"They have got a good reputation in the industry which will be tarnished by these accusations, whether they prove accurate or not," he said.

In July, a US Senate report accused London-based HSBC of concealing more than $16 billion in sensitive transactions with Iran and Mexican drug lords over 2001-2007.

And in June ING Bank was fined $619 million for its role in processing $1.6 billion through the US financial system for Cuba, Iran, Myanmar, Sudan and Libya.

The New York regulator said Standard Chartered's illicit Iran business involved thousands of U-turn transactions, in which dollar-denominated payments and transfers are routed into and then out of the United States by non-US entities.

Such deals involving Iranian institutions were strictly limited, and more recently completely banned, under US sanctions against Tehran.

But the regulator, citing internal Standard Chartered documents, said the bank's London office routinely stripped the transactions of any signs that Iranian banks were involved.

"Senior SCB management knowingly embraced the bank's fraudulent U-turn procedures," the department said.

The bank's attitude was captured in a comment from a group executive director, as related to the New York regulator by an officer of Standard Chartered's New York branch.

Using vulgar language, he purportedly asked: "Who are you to tell us, the rest of the world, that we're not going to deal with Iranians?"

In a statement accompanying an interim profit result last week, chief executive Peter Sands lauded the bank's "culture and values".

"We are selective and turn things down that we don't understand, or don't like the look of," he said.