A court in New York has approved a non-prosecution agreement between JPMorgan Chase the US authorities to settle criminal charges against the banking giant for its failure to report its concerns about Bernard Madoff's private investment service.

U. S. District Judge Kevin Castel gave his approval to $1.7 billion deal between the banking institution and the authorities. The bank has said that it will settle allegations that it ignored signs of Bernard Madoff's Ponzi scheme. The bank has been working to reach a settlement with federal authorities, according to people closer to the matter.

The settlement also involves a deferred prosecution agreement and a criminal action if the bank agrees with the government's case and changes its behaviour. The bank is expected to pay a total of more than $1 billion to the prosecutors in Manhattan and the remaining amount to the Office of the Comptroller of the Currency (OCC) and a unit of the Treasury Department that was involved in investigating the breach of safeguards against money laundering.

A media report said that government is planning to use a part of the money to pay people who lost money to the scheme. Madoff was convicted in 2009 of defrauding thousands of investors and is serving a 150-year prison sentence.

The judge set a January 2016 court date for the government to report if the bank compiled with the settlement agreement.