SBP penalizes 10 banks for Rs465.08m over regulatory breaches

January 29, 2024 (MLN): The State Bank of Pakistan (SBP) has imposed hefty fines on ten banks for violating its rules and regulations, with the total amount of penalties worth Rs465.081 million, according to a document released by SBP's Banking Supervision Department.

The banks were found guilty of breaching the standards of Know Your Customer (KYC), Anti-Money Laundering (AML), asset quality, foreign exchange, and general banking operations.

SBP said that the penalties were based on deficiencies in the compliance of regulatory instructions and did not reflect the financial soundness of the entities.

United Bank Limited (PSX: UBL) was fined Rs114.193m for violating the regulatory instructions pertaining to CDD/KYC, Asset Quality, FX and General Banking Operations. SBP advised the bank to take remedial measures including implementation of necessary systems and controls to avoid recurrence of such violations.

Habib Bank Limited (PSX: HBL) was fined Rs113.367m for violating the regulatory instructions pertaining to AML/CFT, CDD/KYC, FX and General Banking Operations. SBP advised the bank to avoid the recurrence of such violations in the future.

Standard Chartered Bank Pakistan Limited (PSX: SCBPL) was fined Rs58.375m for violating regulatory instructions pertaining to CDD/KYC, FX and General Banking Operations. SBP advised SCBPL to improve its internal processes and controls to avoid similar instances in future.

Meezan Bank Limited (PSX: MEBL) was fined Rs44.705m for violating the regulatory instructions pertaining to CDD/KYC, FX and General Banking Operations. SBP advised the bank to ensure meticulous compliance with the regulatory instructions to avoid such violations in future.

Askari Bank Limited (PSX: AKBL) was the next in line to face a fine worth Rs36.4054m for the violation of regulatory instructions pertaining to CDD/KYC. The central bank has advised the bank to ensure meticulous compliance with the regulatory instructions to avoid recurrence of such instances in future.

SBP further imposed a fine of Rs27.009m on JS Bank Limited (PSX: JSBL) due to violation of regulatory instructions pertaining to CDD/KYC and General Banking Operations and asked JSBL to improve its systems and controls to avoid recurrence of such violations in future.

MCB Bank Limited (PSX: MCB) also violated the regulatory instructions pertaining to CDD/KYC, FX and General Banking Operations. Accordingly, SBP imposed a fine of Rs23.554m and asked the bank to improve its processes to avoid violations in future.

Dubai Islamic Bank Limited was the eighth one that was fined Rs22.1m on account of violation of regulatory instructions pertaining to CDD/KYC. In addition to penal action, the bank has been advised to ensure meticulous compliance with the regulatory instructions to avoid recurrence of such instances in future.

Mobilink Microfinance Bank Limited and Bank Alfalah Limited (PSX: BAFL) were the last two banks to be imposed fines of Rs14.643m and Rs10.73m, respectively.

Both the banks were responsible for the violation of regulatory instructions pertaining to CDD/KYC and General Banking Operations.

Moreover,he central bank asked both entities to conduct an internal enquiry in the light of regulatory violations of Branchless Banking and take appropriate actions.

It is pertinent to note that the central bank has instructed these individual banks to address these issues immediately.

Amount in PKR million

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