Enforcement Action: SBP imposes penalties worth Rs98mn on four major banks

April 26, 2021 (MLN): The State Bank of Pakistan (SBP) has imposed a monetary penalty of Rs97.58 million on four banks that violated SBP’s rules and regulations during Jan-Mar 2021.

According to a notice issued by SBP, the penalty was imposed for various indiscretions ranging from Violations in the areas of FX Operations to Violations in the areas of CDD/KYC/CFT/AML and general banking operations.

Among the banks, the highest penalty of Rs39.772mn was imposed on Habib Bank Limited (HBL) on account of violations of regulatory instructions pertaining to FX & General Banking Operations. Another major bank, MCB Bank Limited, was fined Rs10mn for the same offense.

Fine of Rs 37.095mn was MCB Islamic Bank Limited, a subsidiary of the MCB, for breaches of regulatory instructions related to AML/CFT, FX, and general banking operations. In addition to penal action, the bank has been advised to conduct an internal inquiry on the negligence of regulatory instructions and take disciplinary action against the delinquent officials.

United Bank Limited (UBL) was penalized Rs 0.71mn for violations of regulatory instructions pertaining to CDD/KYC and General Banking Operations. The bank has been asked to strengthen its processes to avoid the recurrence of such violations.

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