Australia's Commonwealth Bank said Tuesday it would slash pay and bonuses of top executives, but backed its chief executive over alleged breaches of money laundering and terrorism financing laws.

The lender, Australia's biggest and the country's largest firm by market capitalisation, was last week taken to court by financial intelligence agency AUSTRAC for "serious and systemic non-compliance" of the laws 53,700 times.

Each breach could attract Aus$18 million (US$14 million) in fines, potentially running into the billions of dollars.

Commonwealth chair Catherine Livingstone said amid "heightened public interest" in top executives' pay, the board had decided to cut short-term bonuses for chief executive Ian Narev and others for the 2017 financial year.

"In reaching this conclusion the overriding consideration of the board was the collective accountability of senior management for the overall reputation of the group," she said in a statement.

"The board also recognised that it has shared accountability and therefore has decided to reduce non-executive director fees by 20 percent in the current 2018 financial year."

Livingstone added that Narev, who is facing calls to quit, "retains the full confidence of the board".

Shares in the bank slipped 0.81 percent to Aus$80.86 in mid-day trade in Sydney. 

Narev has admitted "mistakes were made" in the money laundering case but told The Australian newspaper Monday he was "focused on doing my job and am not spending any time on thinking about my own position". 

Narev's total remuneration in 2016, including fixed pay of Aus$2.65 million, was Aus$12.3 million, according to the bank's annual report.

Other top executives each took home between Aus$1.78 million and Aus$6.51 million, including bonuses, for the same period.

The bank is accused of failing to deliver to AUSTRAC on time 53,506 reports for cash transactions of Aus$10,000 (US$7,900) or more at its cash deposit machines between November 2012 and September 2015, with a total value of Aus$624.7 million.

It also failed to report suspicious transactions on time, or at all, that totalled Aus$77 million, and did not monitor customers or manage the risk even after becoming aware of suspected money laundering, AUSTRAC claimed.

The bank has vowed to fight the allegations.