Dec 3 (Reuters) - Westpac Banking Corp (WBC) agreed to a...

Dec 3 (Reuters) - Westpac Banking Corp (WBC) agreed to a court-backed undertaking with Australia's bank regulator on Thursday to address "long-standing weaknesses" in its risk controls and oversight.

On Tuesday, the Australian Prudential Regulation Authority (APRA) released a review saying it was forcing Westpac to raise its cash reserves after it fell short of prudential standards, its second enforcement action in a year against the country's No. 3 lender.

After that review was released, the APRA instructed Australia's third-largest bank to add an extra 10% to the amount of cash it keeps on hand until an independent review of its risk management was completed.

"Although the bank has made progress in some areas over the past year, it is not good enough," APRA Deputy Chair John Lonsdale said in a statement.

"We continue to observe new prudential issues arising while long-standing weaknesses persist, and we believe Westpac's governance, culture and accountability frameworks and practices are still in need of a substantial uplift."

Westpac now has 90 days to submit its plan to the regulator. This year the bank has paid a record A$1.3 billion ($963.95 million) fine over a 2019 lawsuit accusing it of enabling millions of improper payments, including to people exploiting children.

Westpac's Chief Executive Peter King said his "top priority is to ensure the bank's risk culture and management of risk meet the high standards expected of us," adding that the work should be done at pace. ($1 = 1.3486 Australian dollars)