A person with the knowledge of matter was quoted by Reuters as saying that the fine stems from the structures set up by the bank for its clients that are considered egregious by DFS.
The bank used fake loan arrangements to enable clients to avoid taxes and still have access to the funds, the person added, noting that the two sides are yet to sign a formal agreement.
The fine is separate from demands made by other US federal authorities in last few months to settle the matter.
A Bank Leumi spokesman did not immediately respond to a request for comment, while a New York State Department of Financial Services spokeswoman refused to comment on the report.
Leumi, along with several foreign banks are currently being investigated by the US authorities for helping wealthy US citizens evade taxes by allegedly making illegal transactions to clients’ accounts.
The Tel Aviv-based bank disclosed in June that it was close to finalising a deal to pay nearly $238m to the US Justice Department in the accord related to its Swiss unit, Bloomberg reported.
In August, the bank announced that is also made provisions for the settlement.
The New York State DFS obtained $715m from Credit Suisse in May, as part of an agreement for the bank to pay more than $2.5bn in penalties to US authorities for role in tax evasion.
