NEW YORK ( TheStreet) -- The harsh order handed down by New York state bank regulators against Standard Chartered Bank may not only set up a battle between government watchdogs, but also fill the state's coffers. The New York State Department of Financial Services (DFS) on Monday said Standard Chartered's New York branch had "schemed" with Iran to hide 60,000 transactions, "evading federal sanctions" and operating "as a rogue institution." On Tuesday, Standard Chartered said it was "surprised to receive the order," since the bank "had previously reported that it is conducting a review of its historical compliance and is discussing that review with U.S. agencies, including the DFS, the Department of Justice, the Office of Foreign Assets Control, the Federal Reserve Group of New York and the District Attorney of New York." It is unusual for a bank to be truly "surprised" by this type of order, since the bank would be in close contact with examiners investigating any serious problem. Standard Chartered said "resolution of such matters normally proceeds through a co-ordinated approach" by the regulatory agencies. Standard Chartered was ordered to appear on Aug. 15 before New York Superintendent of Financial Services Benjamin Lawsky to "demonstrate why SCB's license to operate in the state of New York should not be revoked." Standard Chartered said it planned to "discuss these matters with the DFS and to contest their position," and that its review of the Iranian transactions "demonstrates that throughout the period, the group acted to comply, and overwhelmingly did comply, with U.S. sanctions and the regulations relating to U-turn payments." The New York Times reported on Monday that officials at the Federal Reserve and the Justice Department were "stunned" by New York's move against Standard Chartered Bank, and that Treasury officials suspected that Lawsky had "taken too broad a view," according to unnamed sources. Bank fines as budget gravy The New York Department of Financial Services (DFS) was created in October 2011 to consolidate the New York State Insurance Department and the New York State Banking Department. The DFS and its predecessor bank regulatory agency have seen their influence over U.S. banking decline over the past three decades, as numerous large state-chartered institutions have merged or converted to federal charters.