SYDNEY, Dec 1 (Reuters) - The Australian bank regulator said on Tuesday it was forcing Westpac Banking Corp 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.

The Australian Prudential Regulation Authority (APRA) said a review of the bank's risk management found it incorrectly calculated several key capital ratios through 2019 and 2020, reflecting "weaknesses in risk management and oversight, risk control frameworks and risk culture."

The breaches were since fixed, but APRA ordered the Sydney-based lender to add 10% to the amount of cash it keeps on hand until the bank completed an independent review of its risk management. Neither the regulator nor the bank put a dollar figure on the penalty.

The enforcement action draws Westpac back into the kind of regulatory intervention it hoped to put behind it when it agreed in September to a record A$1.3 billion ($955 million) settlement with the country's financial crime watchdog over a 2019 lawsuit accusing it of enabling millions of improper payments, including to people exploiting children.

APRA previously ordered Westpac to put aside A$500 million over the payments scandal.

Westpac had kept its available capital "comfortably above regulatory minimums" but the new penalty "sends a message to the wider banking industry that breaches of prudential standards are not acceptable" APRA Deputy Chair John Lonsdale said in a statement which did not specify the nature of the breaches.

Westpac said the breaches were mainly related to its New Zealand unit.

APRA had found the bank had an "immature and reactive risk culture, unclear accountabilities and inadequate oversight", Westpac said, adding that "we ... accept the need to work faster to address our shortcomings".

Westpac shares were up 1% by midsession, against a broader market gain of 1.2%.

"It's part and parcel of getting the systems right," said Bell Potter analyst TS Lim. "Its reputation is not as good (as other banks) but it's a pretty small number. They have pretty strong capital." ($1 = 1.3600 Australian dollars) (Reporting by Byron Kaye in Sydney and Nikhil Kurian Nainan in Bengaluru; Editing by Leslie Adler and Lincoln Feast)