SBP imposed heavy fines on three commercial banks

the penalty is imposed due to the violations of SBP’s prescribed regulations

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Three commercial banks have been fined by the State Bank of Pakistan (SBP) for the total of Rs. 131.4 million for the quarter ended June 2022. The penalty is imposed due to the violations of SBP’s prescribed regulations.

JS Bank was fined Rs85.14 million for violation of regulatory instructions pertaining to CDD/ KYC (Customer Due Diligence/ Know Your Customer), asset quality, FX (Foreign Exchange), and other general banking operations.

HBL and Bank of Punjab were fined Rs29 million and Rs17.24 million respectively for violating CDD/ KYC regulatory instructions.

The central bank added, “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.”

Read more: SBP to penalize banks upon failure to meet house finance targets

Previously, SBP imposed Rs57.834 million fines on five banks in the last quarter of 2021 (Oct-Dec) for not complying with its instructions on general banking operations.

The banks include Bank Al Habib Limited, the Bank of Punjab, Standard Chartered Bank Pakistan Limited, Askari Bank Limited, and National Bank of Pakistan.

The penalty of Rs13.684 million was imposed on Bank Al Habib, followed by the Bank of Punjab (Rs12.545 million), Standard Chartered Bank Pakistan (Rs11.045 million), Askari Bank (Rs10.300 million), and the NBP (Rs10.260 million). The banks were fined for violating regulations related to general banking operations. The SBP asked the banks to strengthen their processes with respect to identified areas.

Enforcement actions by SBP

Enforcement actions are an integral part of regulatory regime which involves imposition of monetary penalties and other actions against institutions and individuals for violations of laws, rules, regulations, guidelines or directives issued by SBP from time to time.

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