Enforcement action: SBP imposes over Rs465mn in penalties on 10 banks

The State Bank of Pakistan (SBP) imposed penalties worth Rs465.08 million on 10 banks during the quarter ended December 31, 2023, for non-compliance with legal or regulatory requirements.

The central bank 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 central bank on Monday, United Bank Limited (UBL) faced the highest penalty of Rs114.193 million in violation of regulatory instructions pertaining to CDD/KYC (Customer Due Diligence/ Know Your Customer), asset quality, FX and general banking operations.

In addition to penal action, the bank has been advised to take remedial measures including the implementation of necessary systems and controls to avoid recurrence of such violations.

Habib Bank Limited was second on the list with a penalty of Rs113.367 million in violation of regulatory instructions pertaining to AML/CFT (Anti-money Laundering and Counter-terrorism Financing), CDD/KYC, FX and general banking operations.

In addition to penal action, the bank has been advised to avoid recurrence of such violations in future.

Standard Chartered Bank Pakistan Limited was third on the list with a penalty of Rs58.375 million for violation of regulatory instructions to CDD/KYC, FX and general banking operations.

In addition to penal action, the bank has been advised to improve its internal processes and controls to avoid similar instances in future.

Fourth on the list was Meezan Bank Limited, which was penalised Rs44.705 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 ensure meticulous compliance with the regulatory instructions to avoid such violations in future.

Askari Bank Limited was fifth on the list with a penalty of Rs36.405 million for violation of regulatory instructions pertaining to CDD/KYC.

In addition to penal action, the SBP has advised the bank to ensure meticulous compliance with the regulatory instructions to avoid recurrence of such instances in future.

Enforcement action: SBP imposes over Rs83mn in penalties on four banks

The SBP also imposed a penalty of Rs27.009 million on JS Bank Limited for violation of regulatory instructions pertaining to CDD/KYC and general banking operations. The bank has been advised to improve its systems and controls to avoid recurrence of such violations in future.

Seventh on the list was MCB Bank Limited, which was penalised Rs23.554 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 processes to avoid violations in future.

Dubai Islamic Bank Limited (DIB) was eighth on the list with a penalty of Rs22.1 million for the violation of regulatory instructions pertaining to CDD/KYC. SBP has advised DIB to ensure meticulous compliance with the regulatory instructions to avoid the recurrence of such instances in the future.

Ninth on the list was Mobilink Microfinance Bank Limited with a penalty of Rs14.643 million over violation of regulatory instructions pertaining to AML/CFT, CDD/KYC and general banking operations.

In addition to penal action, the bank has been advised to conduct an internal enquiry in light of regulatory violations pertaining to Branchless Banking and take appropriate actions.

Lastly, Bank Alfalah Limited was slapped a penalty of Rs10.730 million due to the violation of regulatory instructions pertaining to CDD/KYC and general banking operations.

In addition to penal action, the bank has been advised to conduct an Inquiry in light of regulatory violations pertaining to Branchless Banking and take action accordingly.