Enforcement action: SBP imposes over Rs350mn in penalties on six banks

The State Bank of Pakistan (SBP) has imposed penalties worth nearly Rs350.8 million on six banks during the quarter ending June 30, 2023, for non-compliance with legal or regulatory requirements.

The SBP takes supervisory enforcement actions against those institutions that fail to comply with legal or regulatory requirements and these actions may range from the imposition of penalties, administrative and financial sanctions, and reference to concerned law enforcement/prosecution agencies.

According to details issued by the SBP on Thursday, National Bank of Pakistan (NBP) faced the highest penalty of Rs144.207 million in violation of regulatory instructions pertaining to Customer Due Diligence (CDD)/ Know Your Customer (KYC) and asset quality.

In addition to penal action, the bank has been advised to enhance the internal processes and controls.

Bank Alfalah Limited was second on the list with a penalty of Rs125.253 million in violation of regulatory instructions pertaining to Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT), CDD/KYC, foreign exchange (FX) and general banking operations.

In addition to penal action, the bank has been advised to ensure meticulous compliance with the regulatory instructions

Meezan Bank Limited was third on the list with the penalty of Rs38.03 million for violation of regulatory instructions pertaining to CDD/KYC, FX and general banking operations. In addition to penal action, the bank has been advised to improve its internal processes.

The central bank also imposed a penalty of Rs20.66 million on Allied Bank Limited in violation of regulatory instructions pertaining to CDD/KYC, FX and general banking operations. In addition to penal action, the bank has been advised to improve its internal processes.

Moreover, Punjab Provincial Cooperative Bank Limited was the fifth bank on the list with a penalty of Rs12.229 million, imposed amid violation of regulatory instructions pertaining to CDD/KYC, asset quality and general banking operations.

In addition to penal action, the bank has been advised to improve its internal processes and controls.

Lastly, Bank Al Habib Limited was penalised Rs10.42 million for violations of regulatory instructions pertaining to CDD/KYC, FX and general banking operations. In addition to penal action, the bank has been advised to monitor the usage of card-based transactions.