Violation of regulatory instructions: SBP imposes Rs290.363m penalty on six banks

KARACHI: The State Bank of Pakistan (SBP) has imposed financial penalty of Rs 290.363 million on 6 banks for violation of regulatory instructions during the quarter ended September 2022.

Major penalty has been imposed on two banks for violation of instructions pertaining to forex operations. The SBP was conducting an investigation into alleged manipulation by some commercial banks of foreign exchange operations in the country. This financial penalty on two banks may be related to the ongoing SBP’s investigations, industry sources said.

According to details of significant enforcement actions by SBP during the quarter ended September 30, 2022, some 6 banks were penalized by the SBP for violation of instructions.

Some Rs 221.75 million fine was imposed on two private banks for violation of regulatory instructions pertaining to Customer Due Diligence (CDD) and Know Your Customer (KYC), Asset Quality, Foreign Exchange and General Banking Operations. In addition to penal action, these banks have been advised by the SBP to strengthen the controls and processes in the identified areas.

SBP fines four banks Rs 108mn over AML, operational violations

Cumulatively, remaining four banks have faced a financial penalty of Rs 68.613 million for Violation of regulatory instructions pertaining to Asset Quality and General Banking Operations.

These banks faced financial fine due to violation of regulatory instructions pertaining to Asset Quality and General Banking Operations, violation of regulatory instructions pertaining to CDD/KYC, Asset Quality and General Banking Operations and violation of regulatory instructions pertaining to General Banking Operations. In addition to penal action, the bank has been advised to strengthen its controls/processes in the identified areas.

According to the SBP, these actions are based on deficiencies in the compliance of regulatory instructions and does not constitute a comment on the financial Soundness of the entities.

Copyright Business Recorder, 2022