FRANKFURTFRANKFURT (Reuters) - German financial watchdog Bafin has extended the mandate of its monitor at Deutsche Bank over the bank's role in a money laundering scandal involving Danske Bank.

Deutsche Bank acted as a correspondent bank for Danske Bank in Estonia, meaning it helped transfer funds on behalf of the Danish lender from Estonia to places like New York.

Bafin said on Friday it had ordered Deutsche Bank to review its group-wide risk management processes in the area of correspondent banking and to adjust them where necessary.

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In order to monitor the implementation of this measure, Bafin said in a statement it had widened the mandate of the special representative appointed in September 2018.

Germany's biggest bank said that there were no indications of misconduct on its part. It has received requests for information from regulators and law enforcement agencies, including the U.S. Federal Reserve, investigating Danske Bank.

Denmark's largest bank is under investigation over suspicious payments totalling 200 billion euros (£176 billion) from 2007 until 2015 from its Estonia branch.

Deutsche Bank has scaled back its correspondent banking business by around 40 percent since 2016. In Russia it cut such activity by around 75 percent since 2016, while it has exited such business in Moldova, Estonia and Latvia.

Board member Karl von Rohr said last week that it had so far not made any provisions for possible Danske-related legal costs.

In 2017, the Fed was among regulators that fined Deutsche Bank nearly $700 million (£546 million) for weak controls that allowed money laundering from Russia. A U.S. Department of Justice investigation into the case is still ongoing.

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(Writing by Arno Schuetze; Editing by Riham Alkousaa and Alexander Smith)