SBP penalizes 8 banks, 1 EC with Rs775.5m over regulatory breaches in 3QFY24

April 17, 2024 (MLN): The State Bank of Pakistan (SBP) has imposed hefty fines worth a total of Rs775.54m on eight banks and one exchange company during the quarter ended March 31, 2024, for violating its rules and regulations, 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.

Bank Alfalah Limited (PSX: BAFL) was fined Rs187.652m for violating the regulatory instructions on FX and General Banking Operations. SBP advised the bank to improve its internal processes in order to avoid recurrence of such violations.

Habib Bank Limited (PSX: HBL) was fined Rs143.376m for violating the regulatory instructions pertaining to AML/CFT, CDD/KYC, FX and General Banking Operations. SBP advised the bank to ensure meticulous compliance with the regulatory instructions to avoid recurrence of similar instances in future.

Bank Al Habib Limited (PSX: BAHL) was fined Rs117.239 m for regulatory instructions pertaining to CDD/KYC and FX. SBP advised BAHL to strengthen its systems and controls to ensure meticulous compliance with the regulatory instructions and avoid recurrence of similar violations.

Meezan Bank Limited (PSX: MEBL) was fined Rs106.2m for violating the regulatory instructions pertaining to FX. SBP advised the bank to strengthen its internal processes in order to minimize recurrence of such violations.

Habib Metropolitan Bank Limited (PSX: HMB) was the next in line to face a fine worth Rs70.915m for the violation of regulatory instructions pertaining to FX. The bank has been advised to strengthen its internal processes to minimize the recurrence of such violations.

SBP further imposed a fine of Rs52.9m on MCB Bank Limited (PSX: MCB) due to violation of regulatory instructions pertaining to FX and General Banking Operations and asked MCB to strengthen its internal processes to avoid the recurrence of such violations.

MCB Islamic Bank Limited also violated regulatory instructions on AML/CFT, CDD/KYC and FX. Accordingly, SBP imposed a fine of Rs38.544m and asked the bank to ensure meticulous compliance with regulatory instructions to avoid enforcement actions in the future.

Bank of Khyber (PSX: BOK) was the eighth one that was fined Rs30.741m on account of violation of regulatory instructions of CDD/KYC, Asset Quality and General Banking Operations.

In addition to penal action, the bank has been advised to ensure meticulous compliance with regulatory instructions to avoid enforcement actions in future.

Royal Exchange Company was the last one to witness a fine of Rs27.975m during 1Q2024.

Amount in PKR million

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