Enforcement Action: SBP imposes Rs 1.684 billion penalty on fifteen banks during March-June 2020

July 12, 2020 (MLN): The State Bank of Pakistan (SBP) has imposed monetary penalty worth Rs 1.684 billion on fifteen banks that violated SBP’s rules and regulations during March-June 2020.

According to a notice issued by SBP, the penalty was imposed mainly on violations in the area of CDD/KYC/CFT, Asset Quality, FX Operations and Corporate Governance.

Among the banks, the highest penalty of Rs 286.33 million was imposed on Bank of Punjab (BOP). In addition to penal action, the bank has been advised to strengthen its process related to KYC/CDD, Asset Quality, FX Operations and Corporate Governance in order to avoid recurrence of such violations in future.

Another major bank, National Bank of Pakistan (NBP), was fined Rs 269.81 million for the same offense.

Hefty fines of Rs 204.217 million and Rs 158.474 million were imposed on Habib Bank Limited (HBL) and MCB Bank Limited (MCB) for procedural violations in the area of CDD/KYC.

Zarai Taraqiati Bank Limited (ZTBL) was the fifth in terms of penalty with Rs 147.25 million on account of violations in the area of AML/CFT. In addition to penal action, the bank has been advised to conduct an internal inquiry on breaches of regulatory instructions and take disciplinary action against the delinquent officials.

The other banks that faced monetary fine by SBP on account of violating its guidelines include; United Bank Limited (RS 137 million) , Faysal Bank Limited (Rs 96.128 million), Meezan Bank Limited (Rs 81.060 million), Punjab Provincial Cooperative Bank Limited (Rs 81.500 million), JS Bank Limited (Rs 71.417 million), Bank Al Habib Limited (RS 46.802 million), Bank Alfalah Limited (Rs 40.305 million), Askari Bank Limited (Rs 29.814 million), Habib Metropolitan Bank Limited (Rs 22.805 million) and Bank Islami Pakistan Limited (Rs 11.517 million).

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